B.

Com Unsolved Exam Paper Part -I

ACCOUNTING 2011 REGULAR

Time: 3Hours Max. Marks: 100
Instruction: Attempt any FIVE questions.

Q. 1 WORKSHEET
Following is the pre closing trail balance of Mehfooz & Company on December
31st, 2010
Debit Credit
Cash 70,000
Accounts Receivable 24,000
Aircraft 1,200,000
Allowance for Depreciation-Aircraft 12,000
Accounts Payable 18,000
Bank Loan 25,000
Capital 1,000,000
Revenue from Passengers 260,000
Revenue from Cargo 85,000
Maintenance & Overhaul 33,000
Passenger Services 15,000
Aircraft Fuel 26,000
Salaries Expense 32,000
Total 1,400,000 1,400,000
Additional Information:
1. Salaries Accrued Rs. 3,000 and Prepaid Salaries for Rs. 5,000
2. Bad Debts estimated at 10% of Accounts Receivable.
3. Interest on Bank Loan Rs. 5,000 outstanding.
4. Unearned Revenue from cargo Rs. 10,000 and Earned Receivable Rs. 7,000
5. Proprietor withdrew cash from the business Rs. 5,000 for private use.
6. Book value of aircraft was estimated at Rs. 1,176,000
REQUIRED:
Prepare a Ten- coloumn Work Sheet from the above data.

Q.2 ADJUSTING & OPENING ENTRIES

Take the balance & adjustments data given in Question No. 1
REQUIRED:
(a) Adjusting & opening journal entries in General Journal
(b) Name any THREE basic Principles of Accounting observed necessarily for
making periodic adjustment.

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B.Com Unsolved Exam Paper Part -I
Q.3 (a) ACCOUNTS RECEIVABLE
The following information is related to Saleem & Company
Accounts Receivable January 01, 2010 Rs. 1,000,000
Allowance for Bad Debts (Cr.) January 01, 2010 Rs. 5,000
Credit Sale & Collection during the year Rs. 800,000
Accounts Receivable written off during the Year Rs. 20,000
Bad Debts estimated 5% on Accounts Receivable, ending balance
REQUIRED:
Compute the amount of Bad Debts and give an Adjusting Entry at December
31st,2010

Q.3 (b) The following ledgers accounts are extracted from Naeem & Company:
Accounts Receivable
January 2010 Balance 150,000 January 2010 Sales Return 15,000
Sales 600,000 Cash 400,000
Sales Discount 10,000
Notes Receivable 25,000
Allowance for B/D 10,000
Allowance for Bad Debts
Jan. 2010 Accounts Receivable 10,000 January 2010 Balance 15,000
REQUIRED:
Prepare entries in General Journal from the above postings.

Q.4 (a) INVENTORY VALUATION:

The following data relates to the business of Aamir & Company:
Date Units Unit Cost /Price
Nov. 01 Beginning 6000 Rs.100
Nov. 05 Purchased 3000 Rs.150
Nov. 15 Sold 4000 Rs.250
Nov. 25 Purchased 7000 Rs.180
Nov. 30 Sold 6000 Rs.300

REQUIRED:
(a) Prepare inventory card under FIFO method.
(b) Assume that Co. uses Periodic Inventory System.
(c) Compute cost of goods sold and merchandise inventory (ending) under
LIFO Method.
4 (b) Saad Co. sells merchandise. At December 31 2010 the Company inventory
amounted to Rs. 50,000. During the 1st week of Jan. 2011 the company made
only one purchase and one sale. These transactions were as follows:
Jan 03 Sold merchandise for Rs. 20,000 on credit. The total cost of merchandise
amounted to Rs. 11,200.
Jan. 07 Purchased merchandise amounted to Rs. 10,000; terms 2/10, n/30.
REQUIRED:
Prepare Journal entries to record above transactions under Perpetual Inventory
System.

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B.Com Unsolved Exam Paper Part -I

Q.5. VOUCHER SYSTEM:

Nazim & Company uses Voucher System by net price method. Following are
the vouchers prepared and cheques issued during December, 2010.
REQUIRED:
Prepare Journal entries to record above transactions under Perpetual Inventory
System.
Dec. 01 Prepared voucher No. 348 for Rs. 40,000 payable to Amjad & Co. for
machinery purchased on terms 3/10, n/30.
Dec.05 Prepared voucher No. 349 for Rs. 35,000 payable to Samsam & Co.
for purchase of merchandise on terms 2/10, n/30.
Dec.07 Issued cheque No. 203 in payment of Voucher No. 348.
Dec.10 Prepared voucher No. 350 for Rs. 4,800 to replenish the petty cash
fund for the following disbursement:
Supplies Rs. 2,200, entertainment Rs. 1,300, postage Rs. 300,
miscellaneous general expense Rs. 1,000.
Dec.20 Issued cheque No. 204 in payment of Voucher No. 349 because the
discount period had elapsed.
Dec.25 Prepared voucher No. 351 for Rs. 5,000 as drawing by owner.
Dec.27 Issued cheque No. 205 in payment of Voucher No. 351.
Dec.28 Prepared voucher No. 352 for Rs.10,000 payable to employees for
December, 2010 salaries.
Dec.31 Issued cheque No. 206 in payment of Voucher No. 352.
REQUIRED:
Record the above transaction in general journal form.

Q.6 (a) DEPRECIATION

Yasir & Company provides the following information:
Rate of Per Unit Cost Salvage Value Estimated Production Units
2 80,000 20,000 ?
4 100,000 ? 20,000
? 150,000 30,000 30,000
3 ? 50,000 150,000
REQUIRED:
Compute the missing amounts from the above table

Q.6 (b) On October 1, 2008, Qasim & Company purchased a machine for Rs.
600,000 on account. The machine had an estimated salvage life of 10 Years and
estimated residual value of Rs. 50,000. The company used Sum of Year Digit
Method for depreciation. On September 30th, 2010 the company traded the
machine for a new machine having an invoice price of Rs. 500,000. The trade
in allowance for the old machine on the date of the exchange was Rs. 400,000.
REQUIRED:
Prepare dated entries in General journal to record purchase of machine, and
the exchange of machine on September 30, 2010. Show all computations.

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B.Com Unsolved Exam Paper Part -I

Q.7 PARTNERSHIP
1. Salary Payable to a partner
2. Drawings made by a partner
3. Fresh capital introduced by a partner
4. Share of profit earned by a partner
5. Commission payable to a partner
6. Interest on capital of a partner
7. Interest on drawings of a partner

REQUIRED:
Assuming the partner’s capital accounts are fixed, record the above events in
relevant accounts.
Q.7 (b) Ansari and Wilayat were partners sharing profits in the ratio 3:2. On
the date of dissolution, their capitals: Ansari Rs.76,500. Wilayat Rs.43,000. The
amount payable to creditors was Rs.275,000. The balance of cash was Rs 7,600.
The other assets realized Rs. 254,300. The expenses on dissolution were Rs.
15,400. All partners were solvent.
REQUIRED:
Prepare General journal Entries for above transactions.

Q. 8 (a) CORRECTION OF ERRORS

The following errors were made during the current year and were discovered
before closing of books of accounting:
1. Accrued advertising expense of Rs. 5,000 was overlooked.
2. Return of goods of Rs. 1,500 by Shakeel was entered in error in Raheel’s
Account.
3. Cash drawing of Rs. 4,000 was credited to the bank of the cashbook.
4. Repair to machinery of Rs. 3,000 was charged to machinery account.

REQUIRED:
Prepare rectifying entries in General Journal
Q. 8 (b) The following errors were made during the year 2009 and were
discovered during 2010:
1. Ending inventory was overstated by Rs. 10,000
2. Credit purchase of Rs. 8,000 was not recorded in 2009 although goods were
received and included in the inventory of 2009
3. Additional investment by owner of Rs. 100,000 was credited to Sales Account.
4. Goods taken out for owner’s use Rs. 7,000 was debited to General Expenses.

REQUIRED:
Prepare rectifying entries in General Journal

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B.Com Unsolved Exam Paper Part -I
ACCOUNTING 2011 PRIVATE
Time: 3Hours Max. Marks: 100

Instruction: Attempt any FIVE questions.

Q.1 The following is the pre - closing trial balance of Yasir & Co. on December
31, 2010.
Accounts Titles Debit Credit
Cash Rs.300,000
Accounts Receivable 200,000
Merchandise Inventory 100,000
Prepaid advertising 90,000
Cost of goods sold 700,000
Salaries Expense 55,000
Supplies expense 15,000
Rent expense 40,000
Accounts Payable Rs.100,000
Unearned Commission 50,000
Yasir Capital 250,000
Sales 11,00,000
15,00,000 15,00,000

Additional Information for Adjustments:

i) Commission Income is unearned to the extent Rs. 15,000.
ii) Supplies used during the year Rs.3,000
iii) Commission receivable for the year Rs.14,000
iv) Prepaid Rent Rs.25,000
v) Salaries Payable for the year amounted to Rs.5,000
vi) Advertising prepaid Rs.43,000.
REQUIRED:
1) Prepare Income Statement for the year ended on Dec. 31,2010:
2) Prepare Balance Sheet as on Dec. 31, 2010.

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B.Com Unsolved Exam Paper Part -I

Q.2 GIVEN:
Following is the unadjusted trial balance of mansoor Trading Co. at
December 31, 2010
Accounts Titles Debit Credit
Cash Rs.20,000
Accounts Receivable 180,000
Merchandise Inventory (1-1-2010) 50,000
Office Supplied 4,000
Furniture 100,000
Allowance for depreciation – furniture Rs.38,000
Accounts Payable 50,000
Mansoor Capital 205,000
Mansoor Drawing 15,000
Sales 267,000
Rent Revenue 80,000
Purchase 180,000
Salaries Expense 51,000
Insurance Expense 40,000
640,000 640,000
Supplementary Data for Adjustments:
(i) Merchandise Inventory on December 31, 2010 was valued at Rs.60,000.
(ii) Salaries Expense for the year amounted to Rs.45,000.
(iii) Unexpired insurance Rs.3,500.
(iv) Depreciation on Furniture for the year Rs.15,000
(v) Office Supplies on hand on December 31,2010 Rs. 1,000
(vi) Rent Revenue includes an amount received in advance Rs.2,000.
(vii) Goods costing Rs.2000 were taken by Mansoor for private use was not
recorded.

REQUIRED:
Prepare 10 columns Worksheet.

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B.Com Unsolved Exam Paper Part -I

Q.3 During the process of completing the bank reconciliation of Rahim Co. on
July 31, 2011 the following facts were discovered:
Cash Book Balance Rs.560,000
Bank Statement Balance (DR) Rs.430,000
(i) A Cheque for Rs.51,000 deposited into bank was wrongly entered into
bank statement for Rs.15,000.
(ii) L/c documents retired but not recorded in cash book Rs.,450,000.
(iii) Bank charged markup on Running Finance Rs.3,600
(iv) Cash Withdrew Rs.500,000 was recorded in cash Book but withholding Tax
Rs.1,000 not recorded.
(v) Bank Credited excess L/c margin charged Rs.9,200.
(vi) M/s Asim Co. paid Rs.50,00 through online.
(vii) Cheque of Zulfiqar Co. Returned Rs.80,000 by bank. And bank charged
Rs.450.
(viii)Rahim Co. paid to Irfan Co. Rs. 50,000 through online but not recorded in
cash book.
(ix) Bank Charged commission Rs.650.
(x) Bank Debited Rs.92,500 against L/c Margin but not recorded in cash book.
(xi) Uncleared Cheques Rs.850,000
(xii) Unpresented cheques Rs.430,000.

REQUIRED:
Prepare Bank Reconciliation Statement and also adjusting entries in the Journal.

Q.4 Following transactions relate to the business of Babar Traders:

Nov 1: Balance in Merchandise inventory 7,000 units @ Rs.7.00.
Nov 2: Purchased merchandise for cash Rs.21,000 at a unit price of Rs.4.00.
Nov 5: Purchased merchandise on account Rs.2,500 at a unit price of Rs.5.00.
Nov 7: Sold 4,100 units on account at Rs.10.00 per unit.
Nov 10: Purchased 5,000 units at Rs.5.00 per unit.
Nov 12: Sold 10,100 units at Rs.10.00 per unit
Nov 15: Purchased 4,500 units at Rs.8.00 per unit
Nov 20: Sold 5,000 units at Rs.10.00 per unit
Nov 25: paid carriage outwards on sales Rs.2,500
REQUIRED:
(a) Prepare dated journal entries, assuming that company uses FIFO Method
under perpetual Inventory system.
(b) Show necessary computation for cost of ending inventory, cost of goods
sold and sales of the merchandise.
(c) Compute the amount of Gross profit under FIFO method.

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B.Com Unsolved Exam Paper Part -I
Q.5 Asim Company purchased the following machines under one head i.e.
machinery:
Machine Date of Purchase Cost(Rs.) Residual Value Life / Rate Method
A June 30,2008 500,000 20% of Cost 20 Years Straight Line
B Nov. 1, 2009 400,000 Rs.80,000 15% Reducing Balance
C July 4, 2010 300,000 Rs.20,000 70,000 hours Working hours
Company’s year end on December 31 each year.
REQUIRED:
(1) Prepare adjusting journal entries for 2008, 2009 and 2010 to record
depreciation for machine. The company has operated machine C 3,000
hours in 2010.
(2) Show allowance for depreciation account for Machinery for the year 2010.
(3) Prepare a partial Balance Sheet on December 31, 2009,

Q. 6 (a) Rafiq & Co. has the following balances on Jan. 1, 2010:
Accounts Receivable - control Rs.450,000.
Allowance for Bad Debts Rs.7,500
During The year Company completed the following transactions:
(1) Total Sales including 60% cash sales of Rs.500,000
(2) Sales Discount Rs.10,000
(3) Collected cash from customer Rs.240,000
(4) One of the customer accounts Receivable subsidiary ledger showed a credit
balance of Rs.5,000.

REQUIRED:
(1) Prepare adjusting journal entries if bad debts estimated @ ½ of 5% of Net
Credit Sales.
(2) Prepare Partial Balance sheet.

Q 6 (b) The following account balance appears on the Balance Sheet of Zafar
& Sons as on December 31, 2010.
Accounts Receivable - control Rs.96,000.
Allowance for doubtful Debts Rs.1,920
During January 2011, the following events took place:
(i) Accounts Receivable of Rs.3,500 are written off as uncollectible.
(ii) An Account Receivable for Rs.1,500 was written off in 2010 is recovered
(iii) Aging of Accounts Receivable at the end of month indicated that Rs.2,000
to be uncollectible.

REQUIRED:
Give the necessary journal Entries to give effects to the above transactions:
i) Give the necessary journal Entries to give effects to the above transactions.
ii) Prepare a Partial Balance Sheet after giving effect to the above events.

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Q.7(a) Nuvaira and Khuba are partners with capital of Rs. 26,000 and Rs. 22,000
respectively. They admit Erma as partner with 1/4th share in the profit of the
firm. Erma brings in Rs. 26,000 as his share of capital.

REQUIRED:
Give journal entry to record the goodwill on Erma's admission.

Q.7(b) Maham, Alvena and Zobia were partners in a firm sharing profits in a
ratio of 3:2:1. Zobia retired and new profit sharing ratio in a firm between
Maham and Alvena was 1:2. On Zobia's retirement the goodwill of the firm
was valued at Rs. 30,000

REQUIRED:
Pass the necessary entry for the treatment of goodwill on Zobia's retirement
without opening goodwill account.

Q.8 Attempt any FOUR of the following:

1. Differentiate between the Books of Original Entry and Books of Final Entry.
Explain each of them with three examples.
2. Define any TWO of the following accounting concepts:
(a) Matching Concept
(b) Cost Concept
(c) Consistency Concept
(d) Going Concern Concept
3. Why does a business prepare a Trail Balance, Income Statement, and
Balance Sheet? Make comparisons between any TWO.
4. Describe the differences between Capital Expenditure and Revenue
Expenditure.
5.
(a) Why do businesses spend a lot of money on accounts department?
(b) Who are possible stakeholders of business?

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B.Com Unsolved Exam Paper Part -I

ACCOUNTING 2010 REGULAR

Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.

1.(a) Each of the six horizontal line sin the following table represents a
separate set:
Beginning Net Ending Cost of G. Profit Net Sales
Inventory Purchase Inventory Goods Sold (loss)
1. 10,000 50,000 ? 40,000 ? 65,000
2. 12,000 ? 10,000 ? 20,000 70,000
3. ? 72,000 18,000 ? 20,000 95,000
4. ? 50,000 15,000 55,000 ? 50,000
5. 20,000 70,000 ? 82,000 (2,000) ?
6. 22,000 ? 18,000 72,000 28,000 ?

REQUIRED:
Copy the above table and fill in the missing amounts, showing computations.

1.(b) The Following are eight independent cases:

No. Paid Accrued Prepaid Expense
1 Salaries 33,000 7,000 Nil ?
2 Rent 40,000 NIL 15,000 ?
3 Advertising 78,000 15,000 18,000 ?
4 Utilities 20,000 5,500 ? 22,500
5 Insurance 77,000 ? 12,000 80,000
6 Repair ? 8,000 11,000 15,000
7 Interest 23,000 Nil Nil ?
8 Taxes ? Nil Nil 22,000
REQUIRED:
Copy the above table and fill in the missing amounts, showing computations.

2. The following are pre - adjustments balances taken from the ledger of
Amjad Company and month - end adjustment data on November 30,2010.

Cash 75,000
Office Supplies 9,000
Prepaid Rent 36,000
Unearned Commission 27,000
Amjad Capital 76,000
Commission Earned 83,000
Salaries Expense 66,000

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ADJUSTMENT DATA:
a) Office Supplies used during the month Rs. 6,000.
b) Unearned Commission was Nil
c) Commission earned during the month Rs. 120,000
d) Prepaid Salaries amounted to Rs.10,000
e) Salaries Expense for the month Rs. 60,000
f) Rent Expense for the month Rs. 30,000

REQUIRED:
Prepare 10-column worksheet

3. Take the balances and the adjustment data given in Question No.2.

REQUIRED:
Prepare:
a. Adjusting Entries
b. Reversing Entries

4. The cash in bank account for Imam Company at January 31, of the current
year indicated a balance of Rs. 18,380. The bank statement indicated a balance
of Rs.29,106. The comparison of the bank statement with the records revealed
the following reconciling items:
Cheques outstanding totaled Rs.13,442.
A deposit of Rs.6,918 has been too late to appear on the bank statement.
The bank had collected Rs.4,330 on notes receivable with face value of Rs.4,000.

A Cheque for Rs.93 issued was erroneously recorded in cash book as Rs.39.
The Cheque was for the payment to Aleem & Co. for the purchase of Office Equipment.
A Cheque drawn for Rs. 505 had been erroneously charged by bank as Rs.550.
Bank service charges for January amounted to Rs.29.

REQUIRED:
(a) Prepare bank reconciliation statement.
(b) Record necessary entries in general Journal form.

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5. (a) Prior to the year - end adjustments Accounts Receivable account of

Mansoor Corporation had a balance of Rs. 1, 40,000 and the Allowance for
Doubtful Accounts showed a credit balance of Rs.2,000. net credit sales for the
year amounted to Rs.9,00,000.
REQUIRED:
Compute the amounts of:
i. Bad debts expense for the year if 10% of the year -end accounts receivable
is estimated to be uncollectible.
ii. Allowance for doubtful accounts at year-end if 1% of net credit sales is
estimated to be uncollectible.

5.(b) On October 31, 2010 prior to adjustment Accounts Receivable account of

Samsam Enterprises had a balance of Rs. 180, 000 and the Allowance for
Doubtful Accounts showed a credit balance of Rs. 1,000. During November
worthless accounts written off amounted to Rs.17, 000 and the previously
written off accounts recovered in the amount of Rs.7,000. On November 30
Accounts Receivable Control account showed a balance of Rs.170,000 and a
customer's account in the subsidiary ledger revealed a credit balance of Rs.4,000.
The Co. has a policy of estimating allowance for doubtful debts equal to 5% of
the month end balance of accounts receivables.
REQUIRED:
Prepare:
1. Adjusting and closing entries on October 31.
2. General Journal entries for November transaction.
3. Adjusting Entries and balance sheet on November 30.

6. (a) The following are selected transactions performed by Zenat Trading

Company:

a. purchased merchandise on account for Rs.27,000

b. Received allowance on supply of defective goods Rs. 2,000.
c. Sold Merchandise costing Rs.16,000 on accounts for Rs. 20,000.
d. Accepted the return of defective merchandise from customer (cost Rs.
4,000 sales price Rs. 5,000).

REQUIRED:
Prepare general journal entries under:
1. Periodic System
2. Perpetual System.

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6. (b) State the effects of understatement of ending inventory on:

i) Cost of goods sold
ii) Net income
iii) Current assets
iv) Total assets
v) owner’s Equity

7. (a) On March 31, 2007 Safeer Company purchased a machine at a cost of

Rs. 4,00,000 which was expected to be sold for Rs. 40,000 after its estimated
useful life of 4 years. Company follows calendar year as its accounting period.
REQUIRED:
Compute annual depreciation expense from 2007 to 2010 under:
i) Sum of the years' digit method
ii) 50% diminishing balance method. Limit the accumulated depreciation to
the amount of depreciable cost.

7. (b) The following are selected transaction performed by Sanaullah & Sons:
Jan. 1 .2007 Purchased equipment at invoice price of Rs.200,000 on credit
terms 2/120, n/30.
Jan. 9.2007 Paid invoice of January 01.
Dec.31.2010 Sold the equipment for cash Rs.40,000
The equipment has estimated life of six year an salvage value of Rs.14,000,
Straight line method is used and account are closed on December 31.
REQUIRED:
Prepare general journal entries to record.
i) Purchase of equipment and payment of invoice.
ii) Sale of equipment supported by proper computations.
8. The following are balance sheet data and Lalani & Mohsin Partnership on
June 30,2010.
Cash 30,000 Lalani, Capital 120,000
Inventory 70,000 Mohsin, Capital 180,000
Land 200,000
On July 1, Sikandar is admitted as a partner after revaluing inventory & Land
at Rs. 50,00 & Rs. 300,000 respectively, recognizing goodwill of Rs.50,000 and
recording accrued taxes Rs.10,000. Sikandar is to purchase 25% of Mohsin's
ownership interest for Rs.65,000 & to be contribute sufficient cash for acquiring
1/3 of the entire partnership equity.
Lalani and Mohsin share profit/loss equally.
REQUIRED:
Prepare:
a. General journal entries.
b. Balance sheet after admission.

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B.Com Unsolved Exam Paper Part -I

ACCOUNTING 2010 PRIVATE

Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.

1. The following are selected balances before adjustments and adjustments

data for Qureshi Enterprises at end of annual accounting period, December 31,
2010.
Debit Credit
Allowance for Bad Debts 4,000
Unexpired Insurance 48,000
Prepaid Rent 16,000
Prepaid Salaries 18,000
Prepaid Taxes 19,000
Rent Payable 8,000
Advertising Payable 10,000
Taxes payable 6,000
Salaries Expense 64,000
Rent Expense 22,000
Advertising Expense 20,000
Taxes Expenses 30,000
ADJUSTMENT DATA:
1. Allowance for bad debts was estimated at Rs 3,000.
2. Insurance policy was acquired on May 1,2010 for one year.
3. Rent was prepaid to the extent of Rs.12,000.
4. Rent Payable amounted to Rs.12,000.
5. Salaries were prepaid to the extent of Rs.6,000.
6. Actual Salaries expense for the year amounted to Rs.78,000.
7. Advertising payable amounted to Rs.14,000.
8. Actual advertising expense for the year amounted to Rs. 21,000.
9. Prepaid taxes were Rs.24,000.
10. Actual taxes for the year amounted to Rs.27,000.
REQUIRED:
Prepare adjusting entries in general journal.

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2. The following are trial balance and adjustment data for Zaidi’s Shop on
December 31, 2010.

Debit Credit
Cash 9,200
Account Receivable 21,400
Merchandise inventory, Jan 1 3,200
Prepaid Rent 1,800
Furniture 12,000
Accumulated Depreciation 2,400
Unearned Commission 3,600
Capital Zaidi 48,400
Sales 30,000
Sales Discount 300
Purchases 32,000
Purchases Return 500
Transportation in 500
Salaries Expense 3,300
Rent Expense 1,200

Adjustment Data:
(a) Accounts receivable were expected to realize Rs. 20,000.
(b) Book value of furniture was estimated at Rs. 9,000.
(c) Rent was prepaid to extent of Rs. 600.
(d) Commission earned during the year amounted to Rs. 2,400.
(e) Actual salaries expense for the year amounted Rs. 4,800.
(f) Merchandise inventory on December 31st was valued at Rs. 8,800.

REQUIRED:
Prepare 10 coloumns work sheet.

3. Take the trial balance and the adjustment data given in Question NO.2.

REQUIRED:
Prepare:
a. Multiple steps income statement
b. Classified balance sheet.

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4. The following transactions were completed during March, 2010 by Khan

Company, which uses voucher system:
01. Issued CHEQUE No.74 FOR Rs.20,000 in payment of outstanding voucher
no.99.
02. Issued Cheque no.75 for establishment of petty cash fund in the amount
of Rs.5,000 (voucher no. 101)
03. Purchased merchandise for Rs.21,000 From Farooqui Ltd. On a/c. (Voucher
no.102). Khan Co. follows perpetual system.
04. Returned merchandise worth Rs.1,000 to Farooqui Ltd. (voucher no.103)
05. Issued Cheque no.76 in payment of voucher no.103 after deducting 2%
cash discount.
06. issued Cheque no.77 for travel advance to an employee (voucher no.104)
07. Signed a 60-day 10% note of Rs.12,000 in payment of outstanding voucher
no.100.
08. Issued Cheque no.78 for Rs.15,600 in settlement of a note payable including
interest Rs.600 (voucher no.105)
09. Issued cheque no.79 for Rs.2,000 to reimburse the travel expense incurred
by the employee in excess of travel advance. (voucher no.106)
10. Issued cheque no.80 to reimburse petty cash fund for supplies expense
Rs.1,600, conveyance expense Rs.1,100, and entertainment expense
Rs.1,400. (Voucher no.107).

REQUIRED:
Using two-column general journal form make entries as the case may be in:
a) Voucher register
b) Cheque register

5. Tariq Traders has the following selected information from its business records
during 2009:
a. Sold merchandise for Rs.2,20,000 on account and for cash Rs. 50,000
b. Collected cash form customers Rs. 60,000
c. Accepted a note from a customer on account Rs. 6,000.
d. A customers A/c. Reveals a credit balance of Rs. 1,000.
e. A Worthless account written off Rs. 7,000.
f. Earlier written off account recovered Rs. 5,000

Balances at 01-01-2009

Accounts Receivable 150,000

Allowance for Bad Debts (Cr.) 7,500
Notes Receivable 3,000

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REQUIRED:
a. Prepare journal entries
b. Compute and prepare the adjusting entry assuming that bad debts are
estimated at 5% of a/c. receivable at end.
c. Prepare the Partial Balance Sheet as at Dec. 31, 2009.

6. Inam Company’s beginning inventory and purchases during the fiscal year
ended June 30, 2010 are as follows:
Units Per Unit
Jul. 1, 09 Inventory 1000 50.00
Jul. 10,09 Purchase 1200 52.50
Aug. 30,09 Purchase 800 55.00
Oct. 1,09 Purchase 2000 56.00
Dec. 15,09 Purchase 1500 57.00
Feb. 1,10 Purchase 700 58.00
Mar. 20,10 Purchase 1370 60.00
May 21,10 Purchase 450 62.00
The company uses the periodic inventory system and the Co. sold 5800 units
for total amount of Rs. 536,000 during the year.
REQUIRED:
Determine the cost of inventory on June 30, 2010 under each of the following
inventory costing methods.
a) FIFO
b) LIFO
c) Weighted average
d) Gross Profit method, assuming that above mentioned sales was made at
an estimated gross profit rate of 40%.

7. The following data relate to the three machines acquired by Mumtaz

Company on Jan 1, 2005:
Machine Cost Useful Life Scrap value Depreciation Method
A 340,000 6 years 40,000 Straight Line
B 500,000 5 years 50,000 Sum of the year’s Digit
C 400,000 4 years 30,000 50% Diminishing Balance

REQUIRED:
a. Compute the annual depreciation expense for the whole life of each
machine and present the data in the following form:
Year Machine A Machine B Machine C
2005
2006
2007
2008
2009
2010

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b. Record in general journal the disposal of machines as per the following
descriptions:
1. Machine C is traded in with Machine D priced Rs. 480,000 receiving trade
in allowance equal to book value on December 31, 2006.
2. Machine B is sold for cash Rs. 190,000 on July 1, 2007.
3. Machine A is retired without any consideration on September 30, 2009.

8. Shadab and Usman are equal partners with capital of Rs. 100,000 each. Jamal
is admitted for 1/3rd interest.
REQUIRED:
Make entries in general journal in each of the following independent cases:
(a) Jamal invests cash Rs.160, 000 in total capital of Rs.360, 000
(b) Jamal invests cash Rs.180, 000 in a total capital of Rs.420, 000
(c) Jamal invests cash Rs.60, 000 in total capital of Rs.270, 000
(d) Usman purchases 1/3rd interest of each of the old partners after recording
goodwill of Rs.10,000

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ACCOUNTING 2009 REGULAR

Time: 3Hours Max. Marks: 100

Instructions: Attempt any FIVE questions.

Q.1 (a) TERMINOLOGY
Briefly describe any FIVE of the following:
a. Contra Asset
b. Book of Original
c. Adjunct Account
d. Discount Lost
e. Book of Final Entry
f. Discount Expense

Q.1 (b) JOURNAL ENTRIES

1. The corrected cash balance at end for a NSF cheque of Rs. 1,000.
2. The merchandise drawing by the owner valued Rs. 2,000.
3. The business cash deposited into the business bank account Rs. 3,000.
4. The discounts lost under net price method of Rs. 4,000.
5. The closing entry for owner's drawings of Rs. 5,000.
6. The correction entry for overcharged bad debts after closing Rs. 6,000.

REQUIRED:
Give the journal entries to record any FIVE of the following.

Q.1 (c) MERCHANDISE BUSINESS

Sumsan Trading completed the following related transactions for a month.
1. Purchased merchandise under the term 2/10, n/30, valued Rs. 100,000.
2. Paid transportation on it Rs. 3,000.
3. Returned defective merchandise valued Rs. 5,000.
4. Availed the discount as payment made within 10 days.

REQUIRED:
Record the above transactions in the General Journal of the trader.

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Q.2 SUBSIDIARY LEDGER / TRIAL BALANCE

Raziq Company started business on 01-01-2009 with a capital investment of Rs.

100,000. On May 31 2009 its special journals revealed the following information:
Purchases Journal (PJ) Rs. 15,000
Sales Journal (SJ) Rs. 45,000

Debit Credit
Accounts Receivable 8,000
Sales 70,000
Capital 100,000
Cash 178,000
Cash Payment Journal (CPJ)
Sundry Accounts:
Salaries Expense 6,000
Utility Expenses 3,000
Accounts Payable 4,000
Cash 13,000
REQUIRED:
a) Compute the May 31, 2009, balances of the required items stated above.
b) Prepare a Trial Balance in sequence at May 31, 2009

Q.3. ADJUSTING AND REVERSING ENTRIES

The following are the unadjusted balances taken from the books of Mubeen
and Company on Dec 31 2008.

DEBIT (RUPEES): Cash 26,000, Supplies 14,000, Accounts Receivable 24,000,

Equipment 36,000, Salaries Expense 20,000 and Advertising Expense 16,000.

CREDIT (RUPEES): Accounts Payable 5,000, Accumulated Depreciation (Equip)

5,000, Mubeen Company 56,000 and Commission Income 70,000.

Balance Day Data: (31-12-2008)

1. Unearned Commission Rs. 5,000.
2. Depreciation expense was estimated at Rs. 6,000.
3. Unrecorded utility expenses for the period Rs. 7,000.
4. Supplies expense Rs. 8,000.
5. Commission accrued Rs. 9,000.
6. Advertising expenses for the period is 20%.

REQUIRED:
Prepare Dated
a) Adjusting / correcting entries.
b) Reversing entries and indicate the entries which have no reversing.

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Q.4. WORKSHEET
Take data from Question No. 3 of this paper.

REQUIRED:
Prepare a ten column worksheet.

Q.5. CASH CONTROL

(a) The following information pertains to Aziz Traders for September 30, 2009.

Balance as per bank statement 220,050

Balance as per cash book 191,025
1. Proceeds of depositors note collected by the bank Rs. ?
2. Deposit in transit Rs. 12,474
3. Outstanding Cheques Rs. 23,195
4. Bank Error detected Rs. 675 from Aziz account for a Rs. 6,750
cheque actually written for

REQUIRED:
Prepare
1. Bank Reconciliation Statement
2. Adjusting entry OR entries.

Q5. (b) Hafeez Company uses the voucher system and performed the following
selected transactions.

Feb 01 Prepared a Voucher No. 27 of Rs. 10,000 for merchandise purchased

at 2/10, n/30.
Feb 04 Recorded the Voucher No. 28 of Rs. 1,000 payable to GEO TV for
advertisement.
Feb 10 Issued a Cheque No. 0033 for the Voucher No. 27 after discount and
a Cheque No. 0035 for the Voucher No. 28
Feb 25 Prepared Voucher No. 29 and issued the Cheque No. 0036 for purchase
of an office typewriter Rs. 5,000.
Feb 28 Prepared Voucher No. 30 for the utility bills of Rs. 4,000 for the
month.

REQUIRED:
Record the above transactions of Voucher and the cheque register (in general
journal)

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Q.6. ACCOUNTS RECEIVABLE

Hadi started business on 01-01-2007 the following are his selected transaction:
2007
Nov 10: Sales of Rs. 320,000 including Cash Sales Rs. 40,000
Dec 25: Collected Rs. 50,000 for Credit Sales.
Dec 31: Hadi estimates the bad debts for the year Rs. 9,000
2008
May 11: Various accounts were found worthless and written-off Rs. 20,000.
July 15: Total sales were Rs. 350,000 including 10% for cash sales.
Oct 25: Total cash collection on accounts Rs .150,000
Nov 20: Previously written-off accounts recovered Rs. 8,000.
Dec 31:Hadi estimates the bad debts for the period Rs. 18,000.

REQUIRED
a. Prepare necessary dated entries in the general journal for the period 2007
and 2008 using allowance method for estimating the bad debts.
b. Prepare the partial Balance Sheet as at end of 2007 only.

Q.7 (a) INVENTORY VALUATION

The following year data is available for a single produce of a Company.
2007 2008
Units Rate Units Rate
Purchases 900 Rs.35 1100 Rs.43
1000 Rs.37 750 Rs.46
650 Rs.40 800 Rs.48
Sales 1000 2300
The Company used FIFO method
REQUIRED:
a. Compute the inventory at end of the each year.
b. What is the amount of beginning inventory of 2008?

Q.7 (b) On February 01, 2008 Abid Company had inventory of a commodity
150 units @ Rs. 15. During February his transactions were as follows:
February 06: Purchased 150 units @ Rs. 16.
February 10: Sold 180 units @ Rs. 20.
February 21: Purchased 150 units @ Rs. 17
February 23: Sold 160 units @ Rs. 22
February 25: A customer returned 10 units from Feb. 10 sale.
The Company uses perpetual system of inventory applying Moving Average
Method.

REQUIRED:
Prepare inventory Card and find out the values of ending inventory.

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Q.8. DEPRECIATION
Khalil Company uses 40% reducing balance method for its office equipment
costing Rs. 300,000, acquired on Sept 01, 2005.
The Salvage value is estimated at 1/6 of the cost. The company closes its books
at December 31 each year.
On January 01, 2008 the equipment was disposed off as under each of the
following independent situations:
1. Discarded equipment without any proceeds.
2. Sold at Loss of Rs. 45,000 for cash.
3. Exchange with similar type of asset along with cash payment of Rs. 16,200
having trade in loss of Rs. 5,000.

REQUIRED:
a. Compute the book value of the asset at 01-01-2008.
b. Give the adjusting and closing entries at Dec 31, 2007.
c. Prepared journal entries for each type of the disposal stated above.

Q.9. PARTNERSHIP - LIQUIDATION

The IMKO partnership is being liquidated. After all liabilities have been paid
and all assets sold, the balances of the partners capital accounts are as follows:
Imran Rs. 5,30,000 credit balance; Muneer Rs. 1,60,000 debit balance; and
Kamran Rs. 4,20,000 credit balance.
The partners share profit and losses as follows:
Imran 30% Muneer 60% and Kamran 10%.

REQUIRED:
If all assets are sold out and all liabilities are paid, estimate the cash and show
its distribution in general journal. Muneer is personally insolvent and nothing
can be recovered from him. Show necessary computations also.

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ACCOUNTING 2009 PRIVATE

Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.
Q.1 SPECIAL JOURNALS
From the following data

2009 Customers Rs.

Feb 2 Waqar Bros. 15,000
Feb 16 Naseem and Sons 20,000
Feb 28 Nasir and co. 10,000
2009 Suppliers Rs.
Feb 2 Maroof Traders 35,000
Feb 16 Qamar Printers 15,000
Feb 28 Hameed Merchant 5,000

REQUIRED:
a. Complete the Sales Journal (Page 22)
b. Complete the Purchases Journal (Page 33)
c. The Control Accounts
d. The Accounts Receivable running balance from subsidiary ledgers.

Q.2. WORK SHEET

Following information related to Zulfiqar and Sons as at December 31, 2008
Balance Before Adjustments
Debits Credits
Rent Expense 5,000
Salaries Expense 20,000
Sales Supplies 3,000
Office Equipment 60,000
Merchandise Inventory 25,000
Cost of Goods Sold 170,000
Cash 40,000
Zulfi – Capital 113,000
Sales 215,000
Sales Return and Allowance 5,000
328,000 328,000
Balance Day (31-12-2008) data:
1. Rent Expense Rs. 3,000
2. Salaries Expense Rs. 25,000 for the year
3. Sales Supplies used Rs. 2,000.
4. 10% Depreciation was estimated on Office Equipment.
REQUIRED:
Prepare a ten column Work Sheet.

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Q.3 ADJUSTING / REVERSING AND BALANCE SHEET
Refer to the Question No. 2 of this paper and prepare:

REQUIRED:
a. Dated Adjusting and Reversing Entries
b. The Balance Sheet as on December 31, 2008.

Q.4. CLOSING AND INCOME STATEMENT

The following extracts are related to Mr. Tariq after adjustments at June 30, 2009.
Sales 250,000 Salaries Expense 10,000
Inventory Beginning 10,000 Bad Debts Expense 3,000
Purchases 53,000 Purchase Returns 1,000
Commission Income 1,000 Depreciation Expense 5,000
Sales Discount 5,000 Utility Expense 4,000
Allow. for bad debts 11,000 Inventory Ending 15,000
Rent Exp. Payable 11,000 Tariq Drawing 19,000
REQUIRED:
a. Necessary dated Closing Entries.
b. An Income Statement for the year ended June 30, 2009

Q.5 BANK RECONCILIATION

M/S Ali Sher's Cash Book showed a debit balance of Rs. 204,520, while the
bank statement showed a credit balance of Rs. 163,650 at 31-01-2009.
1. The following items were discovered causing the difference in cash and
bank balances.
2. Bank charges not entered in cash Rs. 520.
3. Cheques issued but not presented Rs. 25,000.
4. Promissory Note collected by bank, but remains unrecorded in the firm's
books Rs. 46,000.
5. Cheques deposited but not shown on bank statement Rs. 61,350.
6. Interest credited by the bank not recorded in cash Rs. 3,000.
7. NSF cheques returned by the bank Rs. 53,000.

REQUIRED:
Prepare a Bank Reconciliation Statement and also entries to adjust the cash
balance in general journal.

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Q.6. ACCOUNTS RECEIVABLE

The following data is taken over from record of Faizan Co
Balances
31.12.07 31.12.08
Accounts Receivable 150,000 260,000
Allowance for Bad Debts 3,000
Allowance for Bade Debts (before adjustment) 11,000 (Cr.)
During 2008, the following transactions were performed:
1. Total Sales of Rs. 300,000 including credit sales Rs. 240,000.
2. Previously written off accounts recovered Rs. 8,000.
3. Cash collected from customers Rs. 100,000.
4. Accounts Receivable apply on note Rs. 50,000.
5. Overpayment received from a customer Rs. 20,000.
REQUIRED:
a) Estimate the bad debts at Rs. 10% of Receivable.
b) Give the dated adjusting entry for 2008.
c) Prepare complete T accounts for Account Receivable and Allowance for
Bad Debts to justify the above information.
d) Prepare the partial Balance Sheet as on Dec. 31, 2008.

Q.7. INVENTORY VALUATION

The following date related to the business of Ashraf Company, which uses
perpetual system and FIFO method.
Nov. 01 Merchandise Inventory 500 units @ Rs. 50 each.
PURCHASES SALES
Nov. 04, 300 units @ Rs. 55 Nov. 08, 350 units @ Rs. 70
Nov. 09, 400 units @ Rs. 60 Nov. 20, 600 units @ Rs. 80
Nov. 25, 400 units @ Rs. 65 Nov. 30, 100 units @ Rs. 90

REQUIRED:
a) Prepare an inventory card, indicating each day's inventory.
b) Give the cost of goods available for sale and the cost of goods sold at Nov. 30.
c) Compute gross profit.

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Q.8. DEPRECIATION
Arshad & Co. acquired two Machines on 3rd March, 2006 for Rs. 440,000 each.
The machine has estimated salvage value of Rs. 40,000 each. Other information
is as under:
Machines Life in Produces/uses:
A 200,000 units 2006: 50,000 units, 2007 100,000 units
B 500,000 hour 2006: 70,000 units, 2007 : 80,000 units

REQUIRED:
a) Compute the depreciation of both the machine for the year ended dec 31,
2006 and 2007.
b) Give the entries for the above disposal. Show necessary computation also.

After proceeding 150,000 units, the above machine - A was sold at a gain for
Rs. 10,000.
The machine - B was trade in with a new machine - C at Rs. 20,000 Less than
its book value after 150,000 hours of use (Loss is recognized)

Q.9. PARTNERSHIP - LIQUIDATION

Irfan, Imran and Kamran are partners in a firm sharing profits and losses in the
ratio of 2: 3: 1 respectively. They decided to dissolve the firm on January 1,
2010. On this date the firm's position was as follows:
Cash Rs. 140,000, Other Assets? Acc. Payable Rs. 120,000, Irfan Capital Rs.
240,000, Imran Capital Rs. 360,000, Kamran Capital Rs. 120,000.
The other assets were sold for Rs. 460,000, liabilities were paid in full. Remaining
cash was distributed among the partners.

REQUIRED:
a) Give necessary entries in the general journal for the liquidation of firm.
b) Prepare liquidation summary

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ACCOUNTING 2008 REGULAR

Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.

1. WORKSHEET
Following are the data related to pre closing trial balance and Adjusted Balance
of Humna Associate for the month ended November 30, 2008
Name of Accounts Pre closing Trial Balance Adjusted Trial Balance
Cash 4,980 4,980
Commission Receive 3,000 3,850
Office Supplies 600 240
Office equipment 6,600 6,600
Accumulated Depreciation 2,420 2,530
Accounts Payable 1,660 1,660
Salaries Payable 550
Unearned commission 400 190
Humna Capital 12,300 12,300
Humna Drawing 1,000 1,000
Commission Earned 6,900 7,960
Salaries expense 6,000 6,550
Rent expense 1,500 1,500
Off.Supplies expense 360
Depreciation expense 110
23,680 23,680 25,190 25,190
REQUIRED:
(a) Trace out data and prepare necessary adjusting entries.
(b) Prepare a Ten-column worksheet from the above data.

2. (a) DEPRECIATION
Aneel Company purchased equipment for Rs.7,00,000. The estimated resale
value at the end of its useful life is Rs.60,000. The Company uses straight-line
method for computing depreciation .The quartly depreciation of the equipment
is Rs.20,000.
REQUIRED:
Compute total life in year of the equipment.

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2 (b) Qaiser Co. acquired a machine on jan.1 2005 at a cost Rs.5, 00,000. its
operating life was estimated to be 5 year with salvage value of Rs.50,000.The
company closes its accounts on December 31 each year and uses sum of year
digit method for computing depreciation. On June 30, 2008, the machine was
exchanged with a new similar machine having a price of Rs.7, 00,000 and the
trade in allowa nce of the old machine was agreed upon at 80 percentage of
its written down value/a book value.
REQUIRED:
a) Calculate depreciation charge for the years ended Dec.31, 2005, 2006, 2007
and up to June 30, 2008.
b) Calculate balance to pay in cash.
c) Give any entry to record exchange of the machine.

3. BANK RECONCILIATION
The accountant of Faryaz Co.has extracted the following data from its Cash
record and it is bank statement on Nov.30, 2008:
1. Bank overdraft as per Cash Book Rs.106, 400.
2. Bank overdraft as per Pass Book Rs.10, 000.
3. Issued a cheque for Rs.50, 000 to supplier (after the expiry of discount
period), but it was wrongly entered in cash book as Rs.49,000.
4. A debit memo for Rs.5,000 accompained the Bank statement for locker
rent; the bank had erroneously charged this to Fayyaz Co, instead of Fazi
Co.
5. Deposited a customer cheque for Rs.78,400 (after discount deduction) but
it was wrongly recorded in cash Book as Rs.80,000 as if were received after
discount period.
6. A customer cheque for Rs.200,000 deposited directly in bank was by
mistake entered into cash coloumn of the cash book.
7. Issued a cheque for purchase of supplies for Rs.10,000 was recorded on
company record as Rs1,000.
8. Mark up charged by bank was not recorded by the company Rs.2,000.
9. Three cheque totaling Rs.20, 000 were issued to suppliers, but only one
cheque for Rs.5,000 was presented to the bank by the last day of the
month.
10. Four cheque totaling Rs.120,000 were sent to the bank for collection but
only one cheque for Rs.20,000 was cleared and credited by the bank.
REQUIRED:
a) Prepare Bank reconciliation statement for Nov.30, 2008.
b) Pass necessary adjusting entries.

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4. VALUATION OF ACCOUNTS RECEIVABLE

On June 30, 2008, before closing the accounts, the Aiman Company shows the
following selected account balance as under.
Accouts Receivable-Control 6,00,000
Allowance for doubtful Accounts 10,000
Credit sales 10,00,000
Sales Discount 50,000
On this date, following errors omissions were discovered:
1. The sale return and allowance for Rs.50, 000 were not recorded.
2. Promissory Notes of Rs.10, 000 received from customers to apply on
account remained unrecorded.

REQUIRED:
a) General journal entries to correct the error.
b) Prepare adjusting entries and also prepare partial balance sheet at June
30, 2008 under each of the following assumption separately.
(i) Uncollectible account expense is estimated at 2% of net credit sales.
(ii) Allowance for doubtful account is estimated at 10% of account
Receivable (corrected) at the year end.

5. CLOSING ENTRIES & INCOME STATEMENT

The following are the incorrect closing entries, prepared by an in experienced accountant at the end
of the year ended December 31, 2007.
Dec.31 Sales 250,000
2007 Sales Discount 5,000
Open Inventory 10,000
Allowance for bad debts 6,000
Drawing 1,000
Purchase 53,000
Income Summary 325,000
Income Summary 26,000
Ending Inventory 15,000
Commission Income 1,000
Salaries expense 10,000
Depreciation Expense 5,000
Utility Expense 4,000
Bad debts Expense 3,000
Allowance for Depreciation 20,000

REQUIRED:
a) Prepare FOUR correct closing entries.
b) Prepare an income Statement for the year ended December 31, 2007.

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6. INVENTORY VALUATION
Rahat Equipment Co. provides you with the following inventory data.
Date: 2008 Units Cost per unit
January 1 Beginning 40 1250
February 28 Purchases 100 1220
June 25 Purchases 85 1200
November 11 Purchases 110 1800
The Inventory on Dec. 31, 2008, of 50 units.

REQUIRED:
Determine the cost of:
a) Cost of good available for sale and.
b) Required to cost of ending inventory, using FIFO Method Periodic System.

6. (b) Bushra Arshad Firm sells goods at a gross profit of 40% of sales. Following
are the information to relate to sale & purchase of merchandise for the month
of November, 2008:
Sales (Net) during the month 300, 000
Merchandise Inventory (1.11.2008) 9, 600
Purchase (Net) during the month 192, 000
During the month a certain class of merchandise costing to Rs.12,000 was sold
for Rs. 14,400. Expect for this sale, the gross profit on rest of the sales remained
normal at 40%.
REQUIRED:
Determine the cost of ending inventory by Gross Profit Method on November
30th, 2008

7. PARTNERSHIP ADMISSION
Following is the balance sheet on November 30, 2008 of the partnership firm
of Talha & Tayyab who share profit & loss in the ratio of their capital:
ASSETS EQUITIES
Cash 50,000 Capital Talha 25,000
Other Assets 75,000 Capital Tayyab 100,000
125,000 125,000
On this date they agree to admit Abdul Hadi as a partner.
REQUIRED:
Give the required entries on the firm s book to record the admission of Abdul
Hadi & also prepare balance sheet after admission under each of the following
assumptions separately.
a) Abdul Hadi purchase ¼ of each old partner s capital.
b) The new partner invests Rs.75, 000 for a 1/3rd interest, in the total capital
of the firm of Rs.210, 000.
c) The new partner invests Rs.100, 000 for a 1/4th interest in the firm. Record
bonus.

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8. (a) CORRECTION OF ERRORS
The following errors/omissions were made during 2007 & were discovered
before closing of the books of Accouts:
1. Sales returns of Rs.16, 000 was charged to purchase.
2. Outstanding Advertising expense were over looked Rs.45, 000
3. Rs.150, 000 spent for the extension of building was debited to building
repairs accounts.
4. Prepaid salary of Rs.10, 000 was included in salary expense account.
5. Accrued Rent income of Rs.15, 000 was overlooked.
REQUIRED:
Pass rectifying entries in general journal.

8. (b) The following errors were made during the year 2007 & were discovered
in 2008:
1. Purchase of equipment for Rs. 250,000 was debited to Repairs Expense
account in error. Because of this error deprecation on equipment
Rs. 20,000 could not be recorded.
2. Credit purchase of merchandise of Rs. 170,000 was not recorded in 2007
although the goods were received and included in the ended inventory
of 2007.
3. Merchandise of Rs. 180,000 purchased in the month of December, 2007
& included in the ending inventory of 2007, but the purchase was recorded
on January 5, 2008.
4. Ending inventory of 2007 was understood by Rs.5, 000.
REQUIRED:
Pass correcting entries in general journal entries in the year 2008.

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ACCOUNTING 2008 PRIVATE
Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.
1. VALUATION OF ACCOUNTS RECEIVABLE
Hadi Brother furnished the following account balances and transactions
concluded during 2008:
Account Receivable 1.1.2008 150,000
Allowance for bad debts 1.1.2008 6,400
Total cash collected from customers 395,000
Promissory notes received from customers to apply on account 34,000
Credit balance in customers accounts at year end (advance payments) 23,300
Customers account written off during the year 3,600
Gross credit sales for the year 600,000
Sales return and allowance 32,400
Sales discount allowed to customer 4,500
Previously written off A/c. receivable recovered 8,500

Note: Allowance for bad debts December 31, 2008 should be equal to 5% of
the year end balance of accounts receivable account.
REQUIRED:
a) Make posting of the above transactions directly into the accounts receivable
and the allowance for the bad debts accounts. Balance both the accounts
on December 31, 2008.
b) Prepare a journal entry to record the year end adjustment as required in
the note. Prepare a partial balance sheet showing the accounts receivable
and its Allowance for bad Debts accounts.
2. BANK RECONCILIATION:
The accountant of Urooj Ltd. Has extracted the following data from cash Book
(Bank Column) and the bank Statement on November 30, 2008:
1. Credit Balance (O.D) as per Cash Book Rs.74, 000
2. Debit Balance (O.D) as per Bank Statement Rs.62,700
3. Bank charges not recorded by the co.Rs.1, 200
4. Cheque deposited on November 30, 2008 but not shown on Bank
statement Rs.28, 000
5. Deposit by a customer directly made in company account not recorded
by the company Rs.50,000
6. A cheque for purchase of supplies was drawn for Rs.65,000 but was
recorded on company records as for Rs.56,000
7. The company Officer issued a cheque for Rs.5,000 for traveling expense.
This cheque was not recorded by the company
8. Cheque issued during November, but not presented to the bank for
payment Rs.4, 500

REQUIRED:
a) Prepare a Bank Reconciliation Statement showing the corrected balance.
b) Prepare necessary adjusting entries in the general journal.

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3. VOUCHER SYSTEM:
Uroosa Company uses a voucher system for all major expenditures. Selected
transactions for June, 2008 are presented below:
1. Paid a note including accrued interest Rs.41,500 (Face value of note was
Rs.40, 000)
2. Gave a 10% sixty day note in settlement of outstanding voucher for
Rs.10, 000
3. Drew a Cheque for Rs.5,000 to establish a petty cash fund.
4. Purchased goods from Adnan Store for Rs.60,000 making a down payment
of Rs.20,000 & agreeing to pay the balance in 15 Days.
5. Received credit memorandum from Adnan Store for Rs.5,000 for the return
of goods purchased from them.
6. Advanced by cheque Rs.18,000 for traveling expense to an officer making
business trip.
7. Drew a cheque for Rs.4,500 to reimburse petty cash fund office expense.
8. Reimbursed the officer by Cheque of Rs.2,000 for trip expenses incurred
by him in excess of advance of Rs.18,000
9. Paid Adnan Stores invoice taking the discount.
REQUIRED:
Using general journal show how the above transactions would be recorded by
the company in the Voucher Register cheque Register & General Journal.
4. WORKSHEET
The pre closing Trial balance of Nadir & Company on December 31, 2007 is an
under:
Debit balance:
Cash Rs.1, 200, Office Supplies Rs.800, Prepaid Advertising Rs.6, 000, Rent
Expense Rs.3, 000, Furniture Rs.10,000, Salaries expenses Rs.5,000.
(Total: 26,000)
Credit balances:
Allowance for depreciation Rs.2000, Nadir Capital Rs.10,000. Commission
income Rs.14,000 (Total: 26,000)
Data for adjustment on December 31, 2007
1. Office supplies on hand Rs.500
2. Advertising cost unexpired Rs.2,000
3. Current year deprecation on furniture 20% on cost
4. Prepaid salaries Rs.800
5. Actual Rent expense for the year Rs.3,600
6. Commission Receivable Rs.300 and unearned commission Rs.700
REQUIRED:
Prepare a 10 column worksheet.

5. ADJUSTING, CLOSING & REVERSING ENTRIES

Take the data given in Q. No.4.

REQUIRED:
Prepare dated Adjusting, Closing & Reversing entries.

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6. DEPRECIATION
M/s Saad Trading Co. acquired a business machine at a cost of Rs.270,000 on
January 1st, 2003. The life of the machine was estimated at 5 year with a scrap
value of Rs.25,000. The company uses sum of the year digits method for
computing the deprecation.
On January 8, 2006 extra ordinary repairs were made at a cost of Rs.42,500.
As a result of which the normal life of the machine was extended to four year
from January 2006. The Co. uses straight line method after the repairs.
On October 1, 2008 the machine was sold for Rs.48,000. The company follows
calendar year for closing its book of accounts.
REQUIRED:
Prepare dated general journal entries for all the transactions between 2003
and 2008.

7. CORRECTION OF ERRORS:
The book keepers of Amen Company prepare the income statement of the
company which revealed.
Cost of good sold 200,000
Net Income 80,000

The company s Auditor detected the following error.

1. Ending Merchandise Inventory was overstated by Rs.6,000.
2. Sales return of Rs.2,000 were charged to purchased.
3. Sales included Rs.7,000 of advance from customers.
4. Sale of Equipment for Rs.3,000 was credited to sales Account, Book value
of the Equipment was Rs.4,000.
5. Office Supplies of Rs.200 were on hand whereas. The Office Supplies showed
a debit balance of Rs.1,000.
REQUIRED:
a) Prepare a statement showing the amount that should be added to or
deducted from cost of goods sold & Net income so as to arrive at their
correct figures.
b) Assuming the books have not been closed, give the necessary correcting
entries.

8. PARTNERSHIP LIQUIDATION
On December 31, 2007, the following Balance Sheet of M/s. Shireen, Sumaira
& Shabana partners, who share profit and losses and the ratio of 1:2:3
respectively.
ASSETS EQUITIES
Cash 50,000 Accounts Payable 70,000
A/c. Receivable 60,000 Notes Payable Nil
Mrds. Inventory 75,000 Capital – Shireen 90,000
Equipment 30,000 Capital – Sumaira 60,000
Furniture 15,000 Capital - Shabana 10,000
230,000 230,000

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On this date they liquidated their business. Collected Rs.50,000 from the
Accounts Receivable in full settlement. Assets other than Cash & Furniture were
sold out for cash Rs.133,000.
The Furniture was taken over by Shireen at agreed market value of Rs.12,000.
The Creditors were paid Rs.65,000 in full settlement.

REQUIRED:
Give all necessary entries in the general journal of the firm to record the above
process of liquidation assuming Shabana to be personally insolvent.

9. VALUATION OF MERCHANDISE INVENTORY:

The record of Maria Trader Show the following data relating to commodity A:
2008 Units Per Unit
Jan. 1 Opening Inventory 100 50
Feb.5 Purchases 200 55
Mar.12 Purchases 300 54
Mar.14 Sales 350 100
Apr.12 Purchases 500 60
May 14 Purchases 100 70
Jun.30 Sales 400 110

REQUIRED:
a) Compute the cost ending inventory on june 30, 2008 by each the following
method:
1. First in First out (FIFO)
2. Last in first out (LIFO).
Assume that company uses periodic system of inventory valuation.
b) Prepare comparative income statement showing effect of two alternative
valuation methods on gross profit.

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ACCOUNTING 2007 REGULAR

Time: 3Hours Max. Marks: 100

Instructions: Attempt any FIVE questions.

1. FINANCIAL STATEMENTS:
The following is the Pre closing Trial Balance of Tanveer company on June
30,2007
TITLE OF ACCOUNT DEBIT CREDIT
Cash 25,000
Merchandise Inventory 20,000
Account Receivable 80,000
Allowance for bad debts 2,000
Supplies 10,000
Prepaid Insurance 15,000
Furniture 40,000
Allowance for Depreciation 12,000
Accounts Payable 40,000
Unearned Commission 15,000
Tanveer Capital 100,000
Tanveer drawing 12,000
Sales 200,000
Sales Return & Allowance 8,000
Purchases 140,000
Purchase Discount 5,000
Salaries Expense 15,000
Rent Expense 5,000
Total 372,000 372,000

Additional data for adjustments:

1. Merchandise Inventory on June 30, 2007 was valued at Rs.25,000.
2. Salaries expense for the year Rs.20,000.
3. Insurance expired Rs.5,000.
4. Depreciation on furniture for the year Rs.3,000.
5. The Allowance for Bad Debts was estimated at a rate of 5% of the year end
Account Receivable.
6. Unearned Commission at Rs.5,000.

REQUIRED:
1. Prepare Adjusted Trial Balance for the year ended on June 30, 2007.
2. Prepare INCOME STATEMENT for the year ended on June 30, 2007.
3. Prepare classified BALANCE SHEET as on June 30, 2007.

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2. DEPEPRECIATION:
Huma Company purchased various types of Assets. Details are as for.
Assets Date of purchase Cost Estimated Life / Rate Method
Building Jan. 1,2004 20,00,000 40 years Straight Line
Machinery July 1,2005 3,00,000 5% Diminishing Balance
Equipment April 1,2006 4,40,000 10 years Sum of the years digits
On January 10, 2006 the company paid Rs.100,000 for replacing the plaster of
walls of building. It is estimated that the new plaster will extend the life of
building from an originally estimated 40 years to a total of 50 years.
REQUIRED:
a) Compute the Depreciation Expense for the year 2004, 2005 and 2006
(Show your Computation).
b) Record the extra ordinary repair of building in G. Journal.
c) Record the Depreciation expense for the year Ended December 31, 2006.
d) Prepare a partial Balance sheet as on December 31, 2006.

3. INVENTORY VALUATION:
Zulfiqar trading company uses periodic Inventory system. The beginning
Inventory Balance of item “Z” on June 1 and purchases of this item during June
were as follows:
June 01 Inventory 10,000 units @ Rs.10.00.
June 08 purchases 15,000 units @ Rs.14.00.
June 14 purchases 18,000 units @ Rs.16.00.
June 22 purchases 12,000 units @ Rs.18.00.
June 27 purchases 5,000 units @ Rs.20.00.
During the Month of June, Net sales are Rs.875, 000 @ Rs.25 per Unit.
REQUIRED:
a) Determine the cost of ending Inventory under each of the following
methods.
1. FIFO Methods.
2. LIFO Methods.
3. Weighted Average Method.
b) Prepare Comparative Income Statement for the period ended on June
30, 2007 to determine Gross Profit.

4. VALUATION OF ACCOUNTS RECEIVABLE:

Shandar Company has 120 Accounts Receivable in its subsidiary ledger. All
accounts are due in 30 days. On December 31, 2006, an aging schedule was
prepared. The results are summarized below:
Not Yet Due 1,50,000
1-30 Days past Due 90,000
31-60 Days past Due 60,000
61-90 Days past Due 40,000
Over 90 Days past Due 10,000
Customers (118 names) Subtotal 3,50,000

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Two accounts receivable were accidentally omitted from this schedule. The
following data is an available regarding these/cs.
1. Mateen Owes Rs.50, 000 from two invoices: invoice no.101 dated
September 14 in the amount of Rs.40, 000 and invoice no.250 dated
November 9 in the amount of Rs.10, 000.
2. Nadeem Owes Rs.20, 000 from two invoices: invoice no. 230 dated
November 19 in the amount of Rs.12000 and invoice no.410 dated
December 5 in the amount of Rs.8, 000.

REQUIRED:
a) Complete the aging schedule as of December 31st by adding to the column
subtotals and aging of the accounts of Mateen and Nadeem.
b) Prepare a schedule to compute the estimated portion of each age group
that will prove uncollectible and the required balance in the allowance
for Doubtful accounts. The following percentage of each age group are
estimated to be uncollectible: Not yet due, 2%; 1-30 days, 6%;
31-60 days, 15%; 61-90 days, 40% over 90 days, 50%.
c) Prepare the journal entry to bring the Allowance for doubtful accounts
up to its required balance at December 31, 2006. Prior to making this
adjustment, the account has a credit balance of Rs.31,060.
d) Show how accounts receivable would appear in the company’s balance
sheet as at a December 31st, 2006.

5. PARTNERSHIP ADMISSION:
The following is the balance sheet of Mumtaz and Alam Partnership:
BALANCE SHEET
ASSETS EQUITIES
Cash 150,000 Mumtaz’ Capital 300,000
Other Assets 350,000 Alam Capital 200,000
500,000 500,000

Mumtaz and Alam share profit and loss in the ratio of 3:2 they agree to admit
Chohan as a partner.
REQUIRED:
Give the necessary journal entries in each of the following cases separately:
a) Chohan Invests Rs.3,10,000 for 1/3 interest in the firm.
b) Chohan Invests Rs.1,90,000 for 1/3 Interest in the firm. The total capital
of the firm after admission will be Rs.720,000.

6. SPECIAL JOURNAL:
Zakaullah Company uses multiple column cash payment journal. The cash
transactions during the month of September were as follows:

September 01 Purchased equipment for cash Rs.15,000.

September 06 Rent expenses paid Rs.10,000.
September 08 Paid salesmen’s salaries Rs.6,000.
September 10 Paid to Wajid Co. for invoice of September 5,Rs.30,000
less 2%.

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September 14 Purchase furniture Rs.15,000 and machinery Rs.35,000
for future use in business paid cash of Rs.20,000 and
signed a promissory Note for the balance of Rs.30,000.
September 18 Purchased Merchandise for cash Rs.18,000.
September 22 Paid Tariq Traders for invoice of September 16 Rs.26,000
less 2%.
September 24 Paid for three year insurance policy Rs.6,000.
September 27 Purchase Merchandise for Rs.30,000. Paid cash Rs.14,000
and balance amount on credit.
September 30 Paid advertising expenses Rs.5,000.
REQUIRED:
a) Record the above transactions in a six-column Cash Payment Journal.
b) Foot and Rule the journal.

7. VOUCHER SYSTEM:
Ahmed Company uses a voucher system for all major expenditures. Selected
transactions for May 2007 are presented below.
MAY, 2007
02 Drew a cheque Rs.10,000 to establish petty cash fund.
04 Purchased equipment from Aslam Trader for Rs.25,000 terms 2/10,
n/30.
07. Purchased furniture Rs. 42,000 making a down payment of
Rs. 12,000 and agreeing to pay the balance in 20 days.
10. Received credit memorandum from Aslam Traders 15,000 for the
return of equipment purchased from them.
13. Paid Aslam Traders invoice taking the discount.
16. Paid Notes plus accrued interest was Rs. 27,000 (Face value of the
note Rs. 24,000)
19. Advance paid by cheque Rs. 22,000for travelling expenses of a
business trip.
22. Purchased merchandise Rs. 50,000 paying Rs. 20,000 and signing
notes for the balance.
25. Issued 10% 30 days notes for Rs. 25,000 and paid Rs. 45,000 in
settlement of Vouchers payable Rs. 68,000.
30. Reimbursed the officer by cheque with Rs. 3000 for expenses incurred
by him in excess of travel advance.
REQUIRED:
Using General Journal forms show how the above transaction would be recorded
in Voucher Registers, Cheque Register and General Journal.

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8. PARTNERSHIP DIVISION OF N/I OR LOSS:

The selected normal balance of M and I Distributors indicate the following
account balance at the end of the year 2006.
Cash 100,000
Other Assets 400,000
Liabilities 210,000
Capital Maqsood 300,000
Capital Irfan 100,000
Sales 420,000
Sales Return 15,000
Sales Discount 5,000
Cost of goods sold 250,000
Rent Expense 20,000
Advertising Expense 30,000
Commission Income 20,000
The partnership Deed has the following provisions regarding distribution of Net
Income:
1. Each partner is to receive interest @10% on capital balance.
2. Each partner will be allowed a monthly salary of Rs. 4,000.
3. The remaining N/Income or N/L if any will divide equally.

REQUIRED:
a) Pass the closing entries in General Journal and prepare Expenses and
Revenue Summary Account.
b) Prepare an Income Distribution Summary showing the distribution of Net
Income.
c) Make entries for Distribution of Net Income to each partner and close
the Expenses and Revenue Summary Account.

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ACCOUNTING 2007 PRIVATE

Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.
1. FINANCIAL STATEMENTS
On January 5th, 2005, Zafar started a business with cash investment of Rs.200,000
and equipment worth Rs.50,000. He completed the following transactions
during the year 2005.
1. Purchased Merchandise on account for Rs.60,000.
2. Merchandise returned to supplier Rs.5,000.
3. Cash paid to supplier Rs.20,000.
4. Purchased merchandise for cash Rs.25,000.
5. Sold merchandise on credit Rs.90,000.
6. Merchandise returned from customer Rs.10,000.
7. Cash collected from customer Rs.15,000.
8. Sold merchandise for cash Rs.60,000.
9. Purchased equipment for Rs.10,000 and furniture for Rs.20,000 by paying
Rs.6,000 cash and a promissory note for the remainder.
10. Salaries expenses paid for Rs.25,000.
11. Commission income collected Rs.15,000.

Supplementary data for adjustment on 31.12.2005:

1. Depreciation on Furniture was estimated at Rs.3,000 and on equipment
at Rs.4,500.
2. Prepaid salary was Rs.4,000.
3. Unearned commission Rs.2,500.
4. Merchandise Inventory is valued at Rs.10,000.
REQUIRED:
a) Set up necessary T accounts and show the effects of the transactions and
adjustment in the account.
b) Prepare an Income Statement for the year ended on December 31st, 2005.

2. INVENTORY VALUATION
(a) The condensed Income Statement prepared by Nazim Company for two
years are shown below:
2006 2005
Sales 500,000 400,000
Cost of goods sold 410,000 340,000
Gross profit 90,000 60,000
Operating expenses 25,000 20,000
Net income 65,000 40,000

At the end of 2005, the inventory was understated by Rs.15,000 but the error
was not discovered until after the accounts had been closed & Financial
Statement prepared at the end of 06.
REQUIRED:
Compute the corrected net income figures for 2005 & 2006.

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2.(b) The following data for the year 2006 has been collected from the books
of Amjad Company.
Cost Price Retail price
Merchandise Inventory Jan.1 80,000 100,000
Purchases during the year 220,000 300,000
Sales during the year 350,000
Sales return & allowance 20,000
Sales discount 10,000

REQUIRED:
Compute the amount of ending inventory by Retail Price Method.

3. DEPRECIATION
Danish Company purchases a machine on October 1, 2004 at a cost price of
Rs.132,000. Its useful life is estimated to be 15 years and scrap value is estimated
at a Rs.12,000. The company uses sum of the years Digit Method and the
accounts are closed on December 31, each year.
On September 30,2007, the company traded the machine for a new machine
having an invoice price of Rs.150,000. The trade in allowance of the old machine
on the date of the exchange was Rs.50,000.

REQUIRED:
Record the transactions for the year 2004 and 2007 in General Journal and
show the necessary computation.

4. VALUATION OF ACCOUNT RECEIVABLE

Asim Company presented the following selected information for the year 2006.
Account Receivable (Jan. 1.2006) 100,000
Allowance for Bad Debts (Jan.1,2006) 12,000
Total credit sales for the year 210,000
Cash collected from customers 120,000
Sales Return and Allowance 6,000
Sales Discount allowed to customer 4,000
Customer Accounts written off during the year 18,000
Accounts Receivable previously written off collected during the year 15,000

REQUIRED:
a) Prepare the Accounts receivable (Control) and Allowance for Bad debts
account.
b) Record the Bad Debts Expense and prepare a partial Balance Sheet as on
December 31, 2006 under each of the following condition:
1. Bad Debts expense Is estimated to be 2% of net sales.
2. Allowance for Bad Debts on December 31, 2006 should equal 6% of
accounts Receivable as on December 31, 2006.

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5. BANK RECONCILIATION STATEMENT

The accountant of Faraz Company has extracted the following data from its
Cash record and it’s Bank Statement on May 31, 2007.
1. Balance as per Cash record Rs.40,000.
2. Balance as per Bank Statement Rs.50,000.
3. Last day deposit not shown in the Bank Statement Rs.20,000.
4. Uncleared cheque Rs.10,000.
5. Unpresented cheque Rs.15,000.
6. Cheque no.22 for Rs.1,200 was deposited in the Bank but it was recorded
by them as Rs.2,100.
7. Direct deposit in the Bank Rs.12,000 was not recorded in the cash record.
8. Cheque deposited for Rs.6,500 was recorded in the cash record as Rs.5,600.
9. Bank service charges were not recorded in the Cash record Rs.800.
10. Promissory Note paid by the bank was not recorded in the cash record
Rs.5,000.
11. Dividends collection was credited by the Bank but was not recorded in the
cash record Rs.17,000.

REQUIRED:
a) Prepare a Bank Reconciliation Statement on May 31, 2007.
b) Prepare necessary entries to adjust Faraz Company record

6. PARTNERSHIP FORMATION & DISTRIBUTION OF PROFIT OR LOSS

Alia, Shahla and Huma formed a partnership on December 1, 2006. They
contributed as under:
Alia contributed Rs.200,000, Rs.80,000 in the shape of equipment, Rs.100,000
for Machinery and 20,000 for furniture .
Shahla contributed Rs.180,000, Rs.80,000 in the shape of Merchandise, Rs.60,000
for supplies and Rs.40,000 for furniture.Huma invested cash of Rs.220,000.
It was further decided that all partners should contribute equally, being equal
partners. Alia and Shahla invested further sufficient cash to give them interest
equal to that of Huma.
REQUIRED:
a) Give necessary entries in General Journal of the firm to record the
formation of partnership.
b) Prepare Balance Sheet of the firm immediately after the formation.

6 (b) Chohan and Mohsin are partners with capital Balance of Rs.150,000 and
Rs.140,000. They share profit or Loss equally. The partnership agreement is as
under:
i) Salaries paid to Chohan and Mohsin Rs.100,000 and Rs.20,000 respectively.
ii) Commission paid to Chohan and Mohsin Rs.80,000 an Rs.30,000 respectively.
At the end of the period, Net Loss from business is Rs.120,000.

REQUIRED:
Make entries in general Journal and prepare Income / Loss Distribution Summary.

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7. PARTNERSHIP LIQUIDATION
Aziz, Bilal and Chand were partners sharing profits and losses equally. They
decided to liquidate their business. Prior to liquidation, the Balance Sheet of
the firm showed as under.
BALANCE SHEET
ASSETS EQUITIES
Cash 50,000 A/c. Payable 300,000
A/c. Receivable 200,000 Aziz Capital 200,000
Merchandise 150,000 Bilal Capital 170,000
Furniture 300,000 Chand Capital 30,000
The Account Receivable realized Rs.170,000 merchandise was sold for Rs.210,000
and furniture was sold for Rs.210,000 and Furniture was sold for Rs.150,000.
All the Partners are solvent and can contribute any amount towards their
deficiency, if any.
REQUIRED:
a) Given general Journal entries relating to the liquidation of the firm till final
settlement of the accounts of the liabilities and payment to partners.
b) Setup Cash account and Partner’s Capital accounts and show all posting
therein.

8. SPECIAL JOURNAL:
The following cash received transactions were completed by Sanaullah & Co.
during the month of June 2006.
June
01. Sanaullah invested Rs. 250,000 cash to establish business.
04. Sold Merchandise for cash Rs. 30,000.
08. Collected from Kaif’s invoice of June 2, Rs. 45,000, less 2% Cash discount.
10. Sold portion of land not needed in business for a total price of Rs. 70,000.
Consisting of cash of Rs.10,000 and Notes Receivable for Rs 60,000. The
cost of the land was 50,000.
18. Sold Merchandise for cash Rs. 12,500.
20. Sold Merchandise for cash Rs. 35,000.
30. Obtained Rs. 40,000 loan from Bank and issued a Note payable in that
amount.
REQUIRED:
Record the above transactions in a Six - column Cash Receipt Journal.

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ACCOUNTING 2006 REGULAR
Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.

Q.1. WORK SHEET:

Following is the Trial Balance taken from the books of Wasim & Co. on 30th
June, 2006.
Cash 100,000
Accounts receivable 500,000
Prepaid Advertising 40,000
Office Supplies 10,000
Office Equipment 300,000
Wasim’s Capital -------- 662,000
Wasim’s Drawing 5,000
Consulting Fees -------- 400,000
Salaries Expense 31,000
Rent Expense 60,000
Insurance Expense 10,000
Repairs Expense 6,000
Total 10,62,000 10,62,000
ADJUSTMENT DATA:-
i. Supplies on hand at the end of period Rs. 2,000.
ii. Unexpired rent amounted to Rs. 20,000.
iii. Salaries Rs. 4,000 are payable.
iv. Consulting fee still unearned amounted Rs. 15,000.
v. The office equipment is estimated to have an operating life of 10 years
with no salvage. Use the straight line depreciation method.
vi. Advertising expense for the year amounted to Rs. 35,000.
REQUIRED:
Prepare a 10-column Work Sheet from the above data.

Q.2. Take the data given in question no. 1 in this paper and prepare the following.
i. An Income Statement for the year ended June 30, 2006.
ii. A Classified Balance sheet on June 30, 2006.

Q.3. (a). ADJUSTING AND CLOSING ENTRIES:

Following cases for adjustment at year ended June 30, 2006 are taken from
the records of Noman & Co.
i. Accrued interest on Notes Payable Rs. 1,500.
ii. The rent expense account had a balance of Rs. 6,000 which was a full year’s
rent paid in advance on May 1st, 2006.
iii. On April 1st, 2006, Commission Income account was created for Rs. 4,800
of which Rs. 2,000 was unearned.
iv. Salaries expense account showed a debit balance of Rs. 4,500 of which
Rs. 2,050 was prepaid.
v. Allowance for bad debts account showed a debit balance of Rs. 3,400, at
June 30, 2006 which is to be adjusted to a created balance of Rs. 3,400.

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REQUIRED:
For each of the above numbered cases, draft separate adjusting Journal entries.

Q.3. (b). The selected normal balances taken from the. Books of Farauqi & Co.
for the period ended was as under.
Cash 50,000 Transportation-in 8,000
Farauqi’s Capital 200,000 Commission Income 9,000
Sales 180,000 Rent expense 12,000
Purchase 100,000 Depreciation Exp 3,000
Merchandise inventory (1.1.05) 30,000 Account Receivable 40,000
Sales Return 15,000 Account Payable 30,000
Purchase Return 18,000 Salaries exp 12,000
Sales Discount 5,000 Bad Debts exp 2,500
Purchase Discount 2,000 Merchandise Inv (31.12.05) 45,000
REQUIRED: On the basis of above data, prepare closing entries in General
Journal for the period ended on Dec 31st,2005.

4. INVENTORY VALUATION :
Salman & Co. uses a Periodic Inventory system. The records of the company
show the following purchases and sales transactions for the month of Nov
2006.
Nov 1. Inventory 1000 unit @ Rs. 50 each.
Nov 10. Purchases for cash 1600 units @ Rs. 60 each.
Nov 15. Sale for cash 1500 units @ Rs. 100 each.
Nov 20. Purchases on account 2000 units @ Rs. 80 each.
Nov 26. Sales on account 900 units @ Rs. 120 each.
REQUIRED:
(a) Give dated entries in General Journal for purchases and sales of merchandise.
(b) Determine the cost of ending Inventory and the cost of goods sold, separately by:
i) First in First out method.
ii) Last in First out method.

5. DEPRECIATION:
On January 4th, 2002 Mansoor & Co. purchased a machine for Rs. 125,000.
The machine had an estimated service life of 6 years and an estimated residual
value of Rs. 5,000. The company uses Straight Line Method of depreciation
and the accounts are closed on Dec 31st, each year. On January 5, 2004, the
exchanged the machine with a new machine having an invoice price of Rs.
1,00,000. The new machine had an estimated scrape value of Rs. 4000 and
it was to be depreciated at 20% per annum on Diminishing balance Method.
REQUIRED:
Prepare Journal dated entries in proper form to record the purchase of Machine,
depreciation, for the years ended 2002, 2003, & 2004 and the exchange of
machine on January 5, 2004. (Note show computation in full)

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6. (a) VALUATION OF ACCOUNTS RECEIVABLE:
The following balances have been taken from the pre-Closing Trial Balance of
Zeenat Trading Company on June 30, 2006.
Accounts receivable 180,000
Allowance for bad debts 18,000
Gross sales 250,000
Sales return & allowance 10,000

REQUIRED:
Give adjusting Entries under each of the following independent assumption.
(Show the necessary computation).
Case I: Bad debts expense is estimated on June 30, 2006, at 4% of the net
Created Sale.
Case II: The allowance for bad debts is estimated on June 30, 2006, at 10% of
the year-end Balance of account receivable.
Case III: The allowance for bad debts on June 30, 2006, is estimated at Rs
20,000.
Case IV: The allowance for bad debts on June 30, 2006, is estimated at Rs
15,000.

6. (b) The following balance have been taken from the pre-closing trial balance
of Anjum & Co. on Dec 31, 2005:
Account receivable 250,000
Allowance for bad debts (debit balance) 2,500

At December 31, 2005, the account receivable included Rs. 50,000 of the past
dues accounts after careful study of all such past due accounts, the company
estimated that probable laws contain therein was 20% in addition. 1% of the
remaining accounts receivable might prove uncollectable.

REQUIRED:
Calculate bad data expense for 2005 and prepare the necessary adjusting
entry at the end of the year on Dec 31st, 2005.

7. PARTNERSHIP ADMISSION:
Arif and Mobin are partners sharing profit and loss in the ratio of 1:3 respectively.
The following is the balance sheet of their on Jan 1st, 2006.
ASSETS EQUITIES
Cash 60,000 A/C. payable 40,000
A/C. Receivable 50,000 Accrued exp 10,000
Merchandise inv 70,000 Arif Capital 100,000
Supplies 30,000 Mobin Capital 200,000
Equipment 40,000
Land 100,000
350,000 350,000
On Jan 1st, 2006, the partners agree to admit Javed as a partner on the terms
summarized below:
Javed invest sufficient cash to acquire 1/3 (one third) interest in the partnership
after revaluation of following assets and liabilities:

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1) A/c receivable is estimated to realize at Rs. 40,000.
2) Inventory is to be restated at its present replacement value of Rs. 50,000.
3) Land is revalued of Rs. 180,000.
4) Equipment is to be restated at a value of Rs. 30,000.
5) Accrued expenses are Rs. 6,000.
REQUIRED:
a) Give entries in general journal of partnership give effects to the above
valuation at to record Javed’s admission.
b) Prepare a classified balance sheet of the newly formed partnership (show
computation)

8. SPECIAL JOURNALS:
Selected transaction completed by Jamal Superstore during Nov 2006 are given
below:
Nov 01: Sold merchandise on created to Zahoor Rs. 10,000.
Nov 02: Purchase merchandise from Nadeem and capital for Rs. 18,000 terms
2/10, 3/30.
Nov 03: Sold merchandise on created to Adnan Rs. 15,000.
Nov 05: Sold an old furniture for cash Rs. 20,000.
Nov 06: Purchase merchandise on account from Naseem for Rs. 16,000.
Nov 07: The defective merchandise was returned by Zahoor costing Rs. 1000.
Nov 08: Returned defective merchandise Rs. 1500 to Nadeem.
Nov 15: The damaged merchandise was returned by Adnan worth Rs. 1500.
Nov 18: Sold merchandise for each Rs. 8000.
Nov 25: Sold merchandise on created to Alam Rs. 25,000.
Nov 30: The inferior quality merchandise was returned by Alam Rs. 2000.
REQUIRED:
Record the above relevant transaction in the Sales Journal and the purchases
Journal and the other transactions in the General Journal.

9. PARTNERSHIP LIQUIDATION:
The partners of ABC firm agreed to liquidate the partnership. The condensed
balance sheet at May 31st, was as shown below: The partners share profit
and losses equally, and all partners are personally solvent.
BALANCE SHEET
Cash 6,000 Accounts payable 160,000
Other assets 294,000 A capital 60,000
B capital 50,000
C capital 30,000
300,000 300,000
ASSUMPTIONS:
(i) Other assets are sold Rs. 249,000 cash.
(ii) Other assets are sold Rs. 114,000 cash.
REQUIRED:
(i) Prepare a liquidation summary under assumption (i).
(ii) Prepare Journal entries to record liquidation only under assumption (ii).

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ACCOUNTING 2006 PRIVATE
Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.
1. WORK SHEET:
The unadjusted Trial Balance of Fahad sons on Dec..31,2006 is as under-
Fahad Sons
Trial Balance
December 31st, 2006
Particulars Debit Credit
Cash 40,000
Account Receivable 350,000
Merchandise Inventory Beg. 100,000
Prepaid Insurance 40,000
Office Equipment 300,000
Accumulated Dep.(Equip) 60,000
Account payable 85,000
Purchases Return 90,000
Fahad Capital ?
Sales Discounts 10,000
Sales Revenue 850,000
Purchases 600,000
Salaries Expense 240,000
Rent Expense 180,000
Utilities Expense 25,000
Data for adjustment:
a) Salaries unpaid amounted to 15,000 and salaries prepaid amounted to 20,000.
b) Insurance premium expired during the year 25,000.
c) Depreciation on equipment during the year was 30,000.
d) Commission earned but not recorded 40,000.
e) Merchandise Inventory at Dec.31,2006 50,000.
REQUIRED:
Prepare a 10 column work sheet for Fahad Sons.

2. ADJUSTING, CLOSING and REVERSING ENTRIES:

Take the data given in Q No.1 of this paper and prepare dated adjusting, Closing
and Reversing entries.

3. VOUCHER SYSTEM:
Ali Company uses the voucher system. During Dec. 2006 the company entered
into the following transactions:
Dec. 01 Prepared Voucher No. 126 for Imran Real Co. For the Dec. 2006
Rent Rs.3,500.
Dec. 02 Bought merchandise on account from Nestle Co.Rs.8,750 terms
2/10, n/30 Voucher No. 127.
Dec. 08 Prepare Voucher No 128 for SSGC for gas Bill Rs.1,750.

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Dec. 12 Bought Office Supplies from Farhan Company on account Rs.875
terms n/30 , voucher No.129.
Dec. 15 Bought Merchandise on account from Khan Product Rs.17,500
terms 2/10, n/E.O.M, Voucher No. 130
Dec. 20 Received a bill for Rs.1,400 from Shani Advertising for advertisement
published, Prepared Voucher No.131
Dec. 31 Prepared Voucher No. 132 for the monthly salaries of the staff
Rs.17,500
REQUIRED:
a) Make Entries an General Journal for the above transactions.
b) Prepare the voucher Register as well total and rule of the voucher Register

4. ACCOUTS RECEIVABLE:
The Balance Sheet prepared by Nazeer Corporation at Dec., 31,2005 showed
Rs.10,00,000 in accounts receivable and an allowance for doubtful accounts
of Rs.50,000. During 2006, transactions relevant to account receivable are
summarized as follows:
1. Sales on account Rs.1500,000
2. Sales returns and allowance Rs.12,500
3. Cash payment by customers Rs.750,000
4. Accounts receivable from Rehman and company written off
as worthless Rs.10,000
After careful aging and analysis of all customers’ accounts at December 31st,
2006. It was decided that allowance for doubtful accounts should be adjusted
to a balance of Rs.30,000.
REQUIRED:
a) Give entries General Journal from for each of the above transactions.
b) Record the opening balance in Accounts Receivable account and allowance
for Bad Debts A/C and post the relevant entries therein.
c) Prepare the adjusting entry on December 31st, 2006 for provision of
Doubtful accounts in accordance with the corporation’s policy.

5. INVENTORY VALUATION
Inventory data for a merchandise item stocked by Philips Electronics are as follows:
2006. UNITS UNIT COST
March 01 Beginning Inventory 150 2,000
March 04 Purchased 75 1,500
March 15 Sold 100 3,000
March 25 Purchased 175 2,500
March 30 Sold 200 2,500
REQUIRED:
a) Compute
1. The cost of goods sold during March 2006,
2. The ending Inventory and
3. The Gross profit on March 30th, 2006 using the Perpetual Inventory
System and LIFO Method.
b) Prepare dated necessary journal entries for the above transactions,
assuming all transactions were on credit.

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6. BANK RECONCILIATION STATEMENT:

The accountant of Atif and Company extracted the following data from its Cash
Book (Bank Column) and it’s Bank Statement on December 3st, 2006.
1. Balance as per Bank Statement Rs,41,603.
2. Balance as per Cash Book Rs.38,400.
3. Deposits in transit Rs.3,200.
4. Cheque wrongly charged to the Co.’s a/c. by the bank Rs.4,800.
5. Bank service charges not recorded in the Cash Book Rs.320.
6. Shahid Sons cheque was returned by the Bank as dishonored Rs.960.
7. A cheque was issued to Javaid for payment to Rs.821 but was erroneously
recorded by Co. as Rs.504.
8. The Loan granted and credited by the Bank was not recorded in the
company book Rs.8,000.
9. Outstanding cheques were in the amount of Rs.4,800.
REQUIRED:
a) Prepare a Bank Reconciliation Statement for Atif and Company on
December 31st, 2006.
b) Prepare necessary adjusting entries.

7. DEPRECIATION
On January 1st, 2001, Aasim Co. purchased a machine for Rs.135,000. Its life
was estimated to be 5 years with scrap value Rs.10,000. The company uses
40% Diminishing Balance Method. The accounting year ends on Dec.31 each
year. On June 30th,2004 the old machine was traded with a new machine
costing Rs.200,000. The trade in allowance was agreed at Rs.75,000 and the
balance was paid in cash.
REQUIRED:
a) Calculate the depreciation expense on machine for the years ended Dec.,
31,2001,2002,2003 and for 6 months of 2004 on June 30,
b) Calculate the gain or loss on exchange.
c) Calculate the amount to be paid in cash on exchange.
d) Give the necessary journal entries to record the depreciation expense on
Dec.31, 2001, 2002, 2003 & June 30th, 2004 and the exchange of machine
on June 30th, 2004.
Note: Gain or Loss on exchange is not to be recognized in the entry for exchange.
8. PARTNERSHIP – ADMISSION
A and B are partners with capital investment of Rs.48,000 and 32,000 respectively.
They share profit and loss in their capital Ratio. They admit C as a new partner.
REQUIRED:
Prepare necessary journal entries to record C’s admission under each of the
following separate cases and present balance sheet after admission in cases
(3) and (4) only.
1. C invests Rs.40, 000 cash receiving 1/3 interest.
2. C invests Rs.64, 000 cash and office equipment worth Rs.40, 000 receiving
½ interests in the firm (Record Bonus).
3. C buys 1/3 interest of A and ½ interest of B, paying A Rs.28, 800 and B
19,200 directly.
4. C invests 16,000 cash for 1/3 interest (Record G.W).

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ACCOUNTING 2005 REGULAR
Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.
1 WORK SHEET:
The following Balances were taken from the General Ledger of Haleem Sons
on December 31, 2004:
Cash 12,250 Accounts Receivable 5,840
Note Receivable 3,000 Allow. For Bad Debts 100
Merchandise Inv. 20,180 Sales Revenue 95,000
Building 30,000 Interest Revenue 200
Account payable 8,720 Cost of Goods Sold 57,900
Notes Payable 5,000 Salaries Expense 7,500
Haleem Capital 40,000 General Expense 10,900
Property Tax Exp. 750 Interest Expense 700
The data for adjustment to be made at year ended December 31, 2004 are:
1. Property tax still prepaid Rs.250.
2. Accrued interest on notes receivable Rs. 212
3. Accrued interest on notes payable Rs. 150
4. Adjust the allowance for bad debts account to 5% of accounts receivable.
5. Depreciation on building for the year was Rs. 5000

REQUIRED:
Prepare a Ten-Column Work Sheet.

2 (a). DEPRECIATION:
Office Equipment was purchased by NAEEM & Co. for Rs.80,000 on July 1,2003.
The residual value was estimated at 10% of its purchase price and estimated
its life to be 5 years.

REQUIRED:
i) Calculate the amount of depreciation for the year ended Dec.31,2003 &
Dec.31,2004 by 20% Diminishing Balance Method.
ii) Give Necessary entries in General Journal including adjusting and closing
Entries for the Year ended Dec.31, 2003 & 04.
iii) Prepare the Allowance for Depreciation Account & post the above adjusting
entries for 2003 & 2004. Balance the a/c.

2 b) Khalil & Co. sold a computer for Rs.160,000 on January 1,2004. The cost
of Computer Rs.200, 000 and had an Allowance for Depreciation of Rs.38,000.
The Co. uses the straight line Method.
REQUIRED:
Record the necessary transactions in General Journal (Show Computation).

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3. (a) VALUATION OF ACCOUNTS RECEIVABLE
The following account balance appears on the Balance Sheet of Hamna & Co.
as on Dec.31, 2003:
Accounts Receivable Rs.250,000
Allowance for Bad Debts Rs. 8,500
During the year 2004 the following events took place:
(i) Account Receivable of Rs.7,000 were written of as un collectible.
(ii) An Accounts Receivable in the amount Rs.2,000 which had been Written
off in the 2003 was recovered.
(iii) The aging of Accounts Receivable at the end of the year indicated that Rs,
15,500 were estimated to be un collectible.

REQUIRED:
Give the necessary entries to record the above transaction.
3. (b) On Dec. 31.2004 the following balance appeared in the Trial Balance of
Zulfiqar & Co:-

Accounts Receivable Rs.260,000

Sales 500,000
Allowance for Bad debts (Dr) 2,100
Sales Returns & Allowance 20,000

REQUIRED:
Prepare the journal entry to record the estimated Bad Debts expenses at 5%
of Net Sales
4. (a) BANK RECONCILIATION STATEMENT:
Differentiate between Crossed Cheque and Bearer Cheque.

4(b). Following is the information provided by Walyat & Co. at April 30,2005.
Cash in Book
April 1,Balance 3,500 April 30, Withdrawal 16,950
April 30 Deposit 27,100
(i) The Bank Statement showed a debit balance (over draft) of Rs.8,500.
(ii) Deposits in transit Rs.80,000.
(iii) A debit memo for Rs.1,500 accompanied the Bank Statement for locker
rent. The bank had erroneously charged this to Walyat & Co. instead of
Walyat & Sons.
(iv) The Bank Charged Rs.100 for service.
(v) Outstanding Cheque Rs.48,000.
(vi) A direct remittance in the Bank account of Rs.8,000 by a customer.
(vii) Dividend collected by bank on behalf of the company Rs. 3,000 but was
not recorded in cash book.
(viii)A chuque for Rs. 720 of Azeem, a customer that had been deposits in bank
was erroneously recorded in cash book Rs. 270.

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REQUIRED:
Prepare Bank Reconciliation Statement.
5. (a) INVENTORY VALUATION:
Because of an error in counting for merchandise at Dec 31, 2003, Mumtaz &
Co overstated the amount of merchandise on hand by Rs.8,000.

REQUIRED:
If the error had not been discovered until the end of 2004, what was its effect
on:
Net Income 2003, Owner's equity 2003,
Net Income 2004, Owner's equity at December 31, 2004.

5 (b). The inventory record of Essa Company showed the following transactions
for the month ended December 31, 2004:
Units Cost
December 01, Inventory 700 6.20
December 06, Purchases 400 6.40
December 15, Sales @ Rs.14 300 -----
December 22, Sales @ Rs. 15 600 -----
December 28, Purchase 600 6.70
REQUIRED:
Compute the ending inventory under:
(i) LIFO - Perpetual, and
(ii) LIFO - Periodic.
6. PARTNERSHIP ADMISSION
Lalani & Mohsin are partner with capital balance of Rs.270,000 and Rs.180,000
respectively . They shared profit and losses in the ratio of 3:2. They admit Ashraf
as a partner:

REQUIRED:
Entries to record the admission of Ashraf in each of the following situation
separately:
(i) Ashraf invest Rs.70,000 cash for ¼ interest. Record G.W.
(ii) Ashraf purchased 1/3 interest of Lalani for Rs 140,000 cash.
(iii) Ashraf invests Rs.200,000 for ¼ interest and the total capital of the firm
to be Rs.650,000.

7. ACCOUNTING FOR COMPANIES:

The following transactions relate to Khan & Co. Ltd.
(i) The company received application for 200,000 ordinary shares of Rs.10
Each. Allotment letters were issued for Rs.150,000 shares and the Excess
subscriptions amount was refunded.
(ii) The promoters Paid Rs.20,000 for printing of Memorandum of Association
of the company.

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(iii) A Computer was Acquired by issuing 4,000 .Ordinary share of Rs.10 each
fully paid up. The market price per share was Rs.18.
(iv) Declared a Cash Divided of Rs.200,000 and stock Dividend of Rs.3,00,000.
(v) Created Reserve for Debenture Redemption in the amount of Rs.15,000.
(vi) Issued 5,000 Debentures of Rs.100 each at Rs.90 redeemable after 7 years.
(vii) The Bank reported that the amount of Dividend paid was Rs.150,000 and
the unclaimed Dividend was Rs.50,000.
(viii)The company issued 3,000 12% 5 year Debentures of Rs.100 at per
redeemable after 5 year at Rs.105.

REQUIRED:
Give Journal entries for the above transactions.

8. FINANACIAL STATEMENT:
Take the data given in question numbered 1 and the supporting data for
adjustment.

REQUIRED:
Prepare classified:
(i) Income Statement
(ii) Balance Sheet.

9. Write short note on the following:

(i) Principle of Consistency.
(ii) Concept of Going Concern.
(iii) Time Period Principle.
(iv) Principle of adequate disclosure

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ACCOUNTING 2005 PRIVATE

Max. Marks: 100
Time: 3Hours
Instructions: Attempt any FIVE questions.

1. WORK SHEET:
Following are the balance taken from the records of Qasim & BROS on Dec
31, 2004.
Debit Credit
Cash at Bank 40,000
Merchandise Inventory 50,000
Prepaid Rent 9,000
Accounts Receivable 60,000
Equipment 100,000
Qasim Drawing 30,000
Cost of Goods Sold 160,000
Utilities Expense 24,000
Wage Expense 45,000
Unearned Commission 54,000
Qasim Capital 230,000
Sales 184,000
Bonds Payable 50,000
518,000 518,000

Data for adjustment of December 31st, 2004

a) Commission Earned during the year Rs.48,000.
b) Rent expired Rs.6,000.
c) Accrued Wages Rs.7,000.
d) Depreciation on equipment was estimated at 5% on cost.
e) Provide 1% of sales for uncollectible accounts.
REQUIRED:
Prepare a Ten - column Work Sheet.

2. ACCOUNTING FOR CASH CONTROL:

The following information pertains to Umer Bros on June 30, 2005.
(i) Balance as per Cash Book (Bank Column) Rs.26,700.
(ii) Issued a cheque for Rs.486 to a supplier but it was wrongly recorded in
cash book as Rs.846.
(iii) The Bank Collected a Note Receivable for Rs.2,000 and interest earned on
its Rs.500 but not recorded in Cash Book.
(iv) Collection Charges of Rs.300 were not recorded by the Co.
(v) A customer cheque for Rs.3, 500 was returned by Bank Marked as N.S.F.
(vi) Bank Service Charges Rs.300 not recorded in Cash Book.
(vii) Bank Collected Dividend Rs.4, 000 on Behalf of Umer Bros. but not Recorded
in Cash book.

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REQUIRED:
i) Prepare a schedule showing additions to and deductions from the
unadjusted balance.
ii) Prepare necessary adjusting entries.

3. ACCOUNTING FOR COMPANIES

Chuhan & Co Ltd. Was registered with a capital of Rs.20,000,000 ordinary shares
of Rs.10 each. It was in corporate by acquiring the running business of Yasir, a
sole trader, the balance sheet of the business of Yasir as of January 01, 2005
was as under.
Assets Equities
Cash 40,000 Accounts Payable 40,000
Accounts Receivable 120,000 Notes Payable 40,000
Merchandise Inventory 160,000 Allowance for bad Debts 8,000
Office supplies 8,000 Accumulated Depreciation 240,000
Furniture 400,000 Yasir’s Capital 400,000
728,000 728,000
Chuhan & Co. Ltd. Took over the business assets other then cash and assumed
the liabilities, in exchange the company issued 30,000 shares of Rs.10 each at
Rs.15 per share. The company also made an additional issue of 10,000 shares
of Rs.10 each at Rs.15 per share to the public which were subscribed and paid
for.

REQUIRED:
(i) Give the necessary entries in the General journal of Chuhan & Company.
(ii) Prepare initial Balance sheet.

4. DEPRECIATION
During 2004 Fast Company engaged in the following transactions:
Jan.1 The Company traded in its old equipment which had a cost Rs.60,000
and whose accumulated Depreciation was Rs.20,000. The new equipment
had a list price of Rs.84,000. The company was granted Rs.24,000 trade
in allowance for the old Equipment.
Apr.2 The Company sold a building for Rs.255,000. The Building cost Rs.335,000
and had An accumulated depreciation of Rs.135,000 (January 1 1995).
The Company uses straight Line Method of Depreciation. The building
estimated to have a useful life of 20 years and salvage value Rs. 35,000.
Jun 30 The Company disposed of a fully depreciated machine which had a cost
of Rs.15,000 with no salvage value.

REQUIRED:
Record the above transactions in journal

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5. ACCOUNTS RECEIVABLE:
The following information is available in respect of two Co.
Company “A” Company “B”
A/R Balance at December 31, 2004 300,000 200,000
Allowance for Bad Debts January 1, 2004 10,000 20,000
A/R written off during the year 2,000 7,000
Rate of Bad Debts estimated 3% 5%

REQUIRED:
(i) Compute the amount for bad debts for the above companies.
(ii)Give necessary adjusting entries at Dec 31st, 2004 for both companies.
(iii) Show relevant accounts on balance sheet of companies.

6 (a) INVENTORY VALUATION:

Nida & company have the following items in inventory on june 30th, 2005:
INVENTORY COST (Rs.) MARKET PRICE (Rs.)
A 15,000 11,000
B 18,000 20,000
C 25,000 23,000

REQUIRED:
Compute the value of ending inventory using lower of cost or market, item
by item and as a whole.

6 (b) The inventory record of Adam Company for the month of December
2005 is as under:
Units Unit Costs
December 01 Inventory 800 Rs.6
December 06 Purchases 500 Rs.7
December 16 Sales @ Rs. 13 400 ---
December 26 Sales @ Rs. 14 700 ---
December 30 Purchases 900 Rs.8

REQUIRED:
Compute the ending inventory and gross profit on sales using the FIFO
method and the perpetual system.

7. ADJUSTING AND CLOSING ENTRIES

Take the data is given in Question No. 1 of this paper and also consider the
data for adjustment.

REQUIRED:
Give the necessary Adjusting & Closing entries in General Journal

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8. PARTNERSHIP LIQUIDATION/RETIREMENT
Azeem, Fahim and Naeem were partners sharing P/L in the ratio of their capitals.
The Balance Sheet of the firm is under.
Assets Equities
Cash 40,000 Accounts Payable 80,000
Accounts Receivable 60,000 Azeem’s Capital 100,000
Merchandise Inventory 30,000 Fahim’s Capital 60,000
Plant Asset 150,000 Naeem’s Capital 40,000
728,000 728,000
Naeem retires on the above date and is paid the amount equal to the book
value after making the following adjustments. Available cash is paid to him and
issued a Note for the balance.
1. Goodwill of the firm is valued at Rs. 1, 20,000
2. Plant assets are revalued at Rs. 2, 00,000.
3. Allowance for Bad Debts is to be maintaining 5% of the Accounts Receivable.
4. Inventory is revalued at Rs. 25,000.

REQUIRED:
Give necessary entries in the General Journal to revalue the assets and
distribution of revaluation gain of loss. The retiring partner is to be paid an
amount equal to his adjusted capital.

9. Write short notes with examples on the following:

(i) Capital Expenditure and Revenue Expenditures.
(ii) Concept of Business Entity
(iii) Principle of Consistency.

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ACCOUNTING 2004 REGULAR

Q.1 WORK SHEET:
Following is the Pre-closing trial balance of Adnan Traders was on Dec 31, 2003.
Debit Credit
Cash 30,000
Accounts Receivable 20,000
Allowance for Bad Debts 200
Furniture 60,000
Allowance for depreciation (Furniture) 6,400
Adan, Capital 119,800
Office Supplies 6,000
Sales 200,000
Cost of Goods Sold 160,000
Rent Expense 20,000
Prepaid Advertising 10,000
Salaries Expense 20,000
326,200 326,200
Data for Adjustments:
1. Office Supplies unused Rs. 2,000
2. Rent Expense for the year was Rs. 10,000
3. Prepaid Advertising was Rs. 6,000
4. Salaries expense for the year was Rs. 25,000
5. Depreciation on Furniture was estimated at Rs. 6,000
6. Allowance for Bad Debts was estimated at 10% of year and accounts receivable.
REQUIRED:
Prepare a Ten - ColumnWorkSheet

Q.2. ADJUSTING CLOSING AND REVERSING ENTRIES

The Accountant of Kamran Company collected the following data for
adjustments as of December 31, 2003.
1. The Prepaid Insurance account showed a debit balance of Rs. 9,000
representing premium of a 3 - year Insurance paid on September 01, 2003.
2. On October 01, 2003 a pre-payment of Rs. 7,200 for advertisement for
one year in a monthly magazine beginning from that data was recorded
in the Advertisement expense account.
3. On August 01, 2003 the Company had Sub-let a portion of its building
receiving one-year's rent of Rs. 3,600 in advance at that time. This was
credited in full to the Rent Income account.
4. The Office Supplies expense account had a balance of Rs. 5,000 before
adjustment. The Actual supplies used during the year Rs. 1,500.
5. The Company owned a Rs. 12,000, 6 - month note receivable data September
01, 2003. The note bore interest at 10% p.a. Record the Interest accrued
on December 31, 2003.
6. Interest of Rs. 60 was accrued on notes payable at December 31, 2003.

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REQUIRED:
Give in General Journal the necessary adjusting, closing and reversing entries
for the above cases.
Q.3. INCOME STATEMENT AND BALANCE SHEET:
Rehan & Co. prepared a work sheet on December 31, 2003. Shown below are
the Income Statement and Balance Sheet Column of that Work Sheet.
INCOME STATEMENT BALANCE SHEET
DEBIT CREDIT DEBIT CREDIT
Cash 25,000
Account receivable 20,000
Inventory January 01, 2003 20,000
Office equipment 80,000
Allowance for Dep. Equipment 4,000
Rehan Capital 100,000
Rehan Drawing 60,000
Sales 300,000
Sales Return & Allowance 10,000
Purchase 150,000
Purchase Return & Allowance 5,000
Salaries Expense 25,000
Transportation - in 5,000
General Expense 5,000
Insurance Expense 3,000
Depreciation Exp. Equipment 1,000
Salaries Payable 5,000
Prepaid Insurance 10,000
Inventory Dec 31, 2003 30,000 30,000
219,000 335,000
116,000 116,000
Net Income Rs. 335,000 335,000 225,000 225,000
REQUIRED:
On the above prepare income statement and a classified Balance sheet as on
December 31st, 2003.
Q.4. PARTNERSHIP LIQUIDATION:
Azam, Akram and Anwar were partners in a firm. They shared profits and losses
in the ratio of 2:2:1. On June 30, 2003 they decided to liquidate the firm. Before
the liquidation the Balance Sheet of the firm was as under.
Partial Balance Sheet
As on June 30, 2003
ASSETS EQUITIES
Cash 40,000 Accounts Payable 30,000
Other Assets 110,000 Notes Payable 7,500
Azam Capital 50,000
Akram Capital 50,000
Anwar Capital 12,500
1,50,000 1,50,000

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The Other Assets were sold for Rs. 3,000. Anwar was personally insolvent.
REQUIRED:
1. Prepare a liquidation summary.
2. Give Journal entries to record the liquidation process.

Q.5. VALUATION OF ACCOUNTS RECEIVABLE:

On December 31, 2002 the balance sheet of Karim & Co. showed the
following Balance.
Accounts Receivable Rs. 200,000
Less: Allowance for Bad Debts Rs. 4,000
TOTAL Rs.1 96,000
During the year 2003 total sales (including Cash Sales Rs. 50,000) amounted to
Rs. 300,000. An account receivable Rs. 3,500 was written off. A previously
written off accounts receivable of Rs. 1,000 was subsequently recovered to the
extent of Rs. 300.
On December 31, 2003 the Accounts Receivable showed a debit balance of Rs.
250,000. However an analysis of Accounts Receivable subsidiary ledger revealed
that customer's accounts showed a credit balance of Rs. 10,000. On this date
the Company estimated 5% Accounts Receivable at the year and as uncollectible.

REQUIRED:
1. Give the General Journal entries relating to the above information including
entries to adjust & close the bad debts expense.
2. Set up Allowance for Bad Debts account and post the above entries in the
account. Rule off and balance the account.
3. Show how he relevant accounts will be reported in balance sheet on December
31, 2003.

Q.6. INVENTORY VALUATION:

Vaqar & Co. uses perpetual system and uses LIFO Inventory Valuation method.
The records of the Company show the following purchases and Sales transactions
for the month of September 2003.
September 1 Inventory 5000 units @ Rs.5
9 Purchases 2500 units @ Rs.6
14 Sales 2500 units @ Rs.12
19 Purchases 1600 units @ Rs.7
21 Sales 2200 units @ Rs.12
24 Purchases 3000 units @Rs.8
29 Sales 2500 units @ Rs.12
REQUIRED:
Give entries in general journal to record total purchases, total cost of goods
sold and total sales on September 30, Assume that all transactions were on
account.

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Q.7. ACCOUNTING FOR COMPANIES
The following transactions related to Salman Co. Ltd.
1. The Company offered 50,000 shares of Rs. 10 each at Rs. 15. The Company
received application for 65,000 shares. The Company finalized the allotment
and the excess money was refunded.
2. The Company declared stock dividend of Rs. 100,000. The Company issued
9,000 shares of Rs. 10 each in settlement of stock dividend.
3. The Company purchased land worth 5, 00,000 and issued 45,000 shares
of Rs. 10 each to vendor.
4. The Company purchased machine and in consideration there of issued
16,000 share of Rs. 10 each. The market price of the share was Rs. 12.50.
5. The Company issued 2,000 debentures of Rs. 100 each at per repayable
after five years at 5% redemption premium.
6. The Company issued 1,000 debentures of Rs.100 each at Rs. 95 repayable
after five years at Rs. 105.
REQUIRED:
Record the above transactions in the General Journal of the Company.

Q.8. DEPRECIATION
Arsalan & Co. records the acquisition of Vehicles in the account titled as "Delivery
Equipment". Following are details of Vehicles purchases.
Data of Purchased Types of Vehicles Cost
January 01, 2001 Truck Rs. 500,000
July 01, 2001 Car Rs. 250,000
October 01, 2002 Van Rs. 300,000
It was decided to depreciate delivery equipment at 10% p.a. on Straight Line Method.
REQUIRED:
1. Write up Delivery Equipment Account, Depreciation Expense account and
Allowance for Depreciation Account for the year ended December 31,
2001, 2002 and 2003. Close and balance (as the case may be) the accounts
at each year end. Show Computations of each year's depreciation charges.
2. Prepare Balance Sheet (Partial) on December 31, 2003 showing the relevant
account.

Q.9 Write short note on the following give appropriate examples

a. Principle of conservatism
b. Principle of consistency
c. Concept of business entries
d. Concept of going concern

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ACCOUNTING 2004 PRIVATE
Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions

Q.1 WORK SHEET

Following in the Pre - Closing trial balance of Rehan Co. at Dec 31, 2003.
Debit Credit
1. Cash 20,000
2. Accounts Receivable 60,000
3. Office Supplies 5,000
4. Office Equipment 60,000
5. Allowance for Depreciation (Equipment) 6,000
6. Accounts Payable 20,000
7. REHAN, Capital 95,000
8. REHAN, Drawings 15,000
9. Commission Income 90,000
10. Salaries Expense 31,000
11. Rent Expense 20,000
211,000 211,000
Data for Adjustments
1. Office Supplies unused Rs. 2,000
2. Unpaid Salaries Rs.4,000
3. Actual Rent for the year was Rs 18,000
4. Commission Earned Rs 80,000
5. Commission Receivable Rs 7,000
6. Salary paid to Office Assistant Rs 5,000 was wrongly charged to drawing Account.
7. Depreciation was estimated at 10% P.A by the diminishing balance method.
REQUIRED:
Prepare a Ten - Column Work Sheet

Q.2. ADJUSTING, CLOSING AND OPENING ENTRIES:

Take the data given in Questions No. 1 of this paper.
REQUIRED:
Prepare in the General Journal Adjusting and closing entries on December 31,
2003 and Opening Journal entry on January 01, 2004.

Q.3. ACCOUNTING FOR CASH CONTROL

The following data relate to Zia & Co.
1. Balance as per Bank Statement June 30, 2003. Rs. 14,775
2. Balance as per Cash Book June 30, 2003. Rs. 5,990.
3. Outstanding Cheques Rs. 9,900
4. Bank Deposit of June 30 for Rs. 15,700 was not shown in the Bank Statement.

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5. The Bank collected a note receivable for Rs. 5,075 but not recorded in the
Cash Book.
6. Cheques deposited by a Customer directly into Bank but not recorded in
the Cash Book Rs. 8,000.
7. A Cheques of Rs. 890 of Majeed, a customer which had been deposited
into Bank was erroneously recorded in the Cash Book as Rs. 980.
8. A cheque amounting to Rs. 2,000 returned by bank marked N.S.F.
(dishonored). No entry was made in the Cash Book.
9. Dividend collected by bank was not recorded in the Cash Book Rs. 4,000.
10. Bank Charges of Rs. 400 were not recorded by the Company.
REQUIRED:
1. Prepare a Bank Reconciliation Statement on June 30.
2. Prepare adjusting journal entries.

Q.4. PARTNERSHIP ADMISSION:

Asghar and Zaheer are partners with Capital balances of Rs. 99,000 and Rs.
54,000 respectively. They share profits to and losses in the ratio of 3:2.
REQUIRED:
Prepare the Journal entries to record the admission of Razi to the partnership
under each of the following independent cases.
1. Razi paid to Zaheer Rs. 30,000 for a one-half of Zaheer's interest on
admission.
2. Razi invested sufficient Cash in the firm to acquire a one fourth interest
in the Capital of new partnership.
3. Razi invested Rs. 67,000 for a one fifth interest in the Capital. Goodwill not
be recorded.
4. Razi invested Rs. 39,000 for a One-fourth interest (Use goodwill method)

Q.5. VALUATION OF ACCOUNTS RECEIVABLE:

On January 01, 2003 the Accounts Receivable account in the General Ledger
of Rahim & Co. Showed a balance of Rs. 204,000 and Allowance for bad debts
account showed a Credit balance of Rs. 13,200. The transactions for the year
ended December 31, 2003 were as under.
1. Sales on account Rs. 180,320.
2. Cash received from Customers Rs. 182,400.
3. Customer's accounts written off amounted to Rs. 4,640.
4. Aging of Accounts Receivable at the end of year indicated that Rs. 14,640
was estimated to be Uncollectible.
REQUIRED:
1. Record the above transactions in the General Journal including the year-
end adjusting journal entry.
2. Set up Accounts Receivable account and Allowance for bad debts account.
Post the Journal entries in these accounts. Rule off and balance the accounts.
3. Prepare a Balance Sheet (Partial) at December 31, 2003 showing relevant
account balances.

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Q.6. INVENTORY VALUATION:
The following data relate to the business of Arsalan Trading Company which
uses perpetual inventory system and uses FIFO inventory valuation method.
UNITS UNITSCOSTS
November 01, Inventory 50 Rs.50
November 04, Purchases 30 Rs.55
November 08, Sales 35 Rs.80
November 09, Purchases 40 Rs.60
November 20, Sales 60 Rs.85
November 25, Purchases 40 Rs.65
November 30, Sales 10 Rs.100
REQUIRED:
1. Compute the cost of Inventory on November 30.
2. Compute the gross profit on sales for the month of November

Q.7. DEPRECIATION:
On March 01, 2002 Babar & Co. purchased a machine for Rs. 62,000 Cash. The
estimated scrap value was Rs. 4,000 and the estimated life was 8 years. The
Company paid Rs. 2,000 for the machine installation. The Company closes its
books annually on December 31 and computes depreciation by the Straight
line method from the first day of the month in which the asset was acquired.
After using the machine for four months it was serviced and repaired on July
01, 2002 at cost of Rs. 3,000.
The Company sold the machine on October 01, 2004 for Rs. 54,300 cash.
REQUIRED:
Prepare journal entries in books of the company for all the transactions
mentioned above including annual adjusting journal entries and entry for
disposal of the machine.

Q8. Accounting for Companies:

Nishat Co. Ltd. Made the following issuance of shares and debentures:
1. The Company issued 60,000 ordinary shares of Rs. 10 each at Rs. 12 per
share to public, Applications were received for 70,000 shares 60,000 shares
were allotted and the excess money was refunded.
2. Land was acquired by issuing 40,000 ordinary shares of Rs. 10 each. The
market price per share was Rs. 15.
3. The promoters of the Company were allotted 6,000 ordinary shares of Rs.
10 each in consideration of their services rendered.
4. Mortgage payable of Rs. 60,000 was settled by the issue of Ordinary shares
of Rs. 10 each. The market value of the share was Rs. 15.
5. Received Rs. 95,000 against the issue of 1000 10% debenture of Rs. 100
each redeemable at par after 5 years.
REQUIRED:
Record the above transactions in the General Journal of the Company.

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Q. 9 ACCOUNTING CONCEPTS & PRINCIPLES
Write short notes on any THREE of the following:
1. Concept of Going Concern
2. Principle of Consistency
3. Principle of Adequate Disclosure
4. GAAP
5. Time Period Principle

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ACCOUNTING 2003 REGULAR & PRIVATE

Time: 3Hours Max.Marks: 100

Instructions: Attempt FIVE questions, all questions carry equal marks.
Q. 1. (a) ACCOUNTING PRINCIPLES:
Name the accounting principles indicated by each of the following
statements.
1. Every business unit has a separate existence from its owner.
2. To use the same accounting principle without changing it and practice year
after year.
3. The assumption that an entity will continue indefinitely.
4. Recording the assets at their acquisition cost.

Q.1 (b) ACCOUNTING EQUATION:

Which of the following is not a correct form of the accounting equation.
1. Assets = Liabilities + Owner’s Equity.
2. Assets = Equities
3. Assets + Owner’s Equity = Liabilities

Q.1 (C). ACCOUNTING TERMINOLOGY:

Briefly explain and illustrate any SIX of the following.
1. Accounting–the language of business.
2. Accelerated depreciation methods.
3. Limited Company.
4. Operating Cycle.
5. Extra Ordinary Repairs.
6. Cash Short and Over. 7. Credit Balance at a Customer Account.

Q.2. WORK SHEET:

Following is the Trial Balance taken from the books of Maha & Co. on 31st Dec. 2002.
Cash 26,000
Office Supplies 14,000
Prepaid Rent 24,000
Equipment (at cost) 36,000
Salaries Expense 20,000
Insurance Expense 16,000
Allowance for Dep. Equipment 10,000
Maha Capital 50,000
Commission Income 76,000
Total 136,000 136,000
ADJUSTMENT DATA:-
i. Commission Receivable Rs. 5,000
ii. Unearned Commission Rs. 3,000
iii. Prepaid Rent Expired Rs. 18,000
iv. Unpaid Insurance Expense Rs. 4,000

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v. Office supplies consumed Rs. 8,000
vi. Provide depreciation on office equipment at 15% of cost.
vii. Prepaid Salaries Rs. 5,000
REQUIRED:
Prepare 10-column worksheet

3. ADJUSTING AND REVERSING ENTRIES:

Take the data relating to adjustments in Questions No. 2.
REQUIRED:
Pass necessary ADJUSTING and REVERSING Entries.

4. BANK RECONCILIATION STATEMENT

The Cash Book of Liaq & Co. showed a Debit Balance of Rs. 20,452 while the
Bank Statement for the month of November 2003 showed the Balance of Rs.
16,365/=. Following items were discovered causing the difference.
i. Bank Charges not entered in Cash Book Rs. 52
ii. Late Deposits not recorded by Bank Rs. 3,135
iii. Cheques issued but not presented Rs. 2,500
iv. Promissory Note Collected by Bank Rs. 4,600
v. Cheque deposited but not shown on Bank Statement Rs. 3,000
vi. Zakat deducted Rs. 1,000 & interest credited Rs. 300 by Bank.
vii. Cheques dishonored and returned by Bank Rs. 4,300
REQUIRED:
Prepare Bank Reconciliation Statement and Adjusting Entries in the Journal.

Q.5(a) PARTNERSHIP:
On March 21, 2003 Mobeen & Zulfi agreed to form a partnership Mobeen
invested Equipment at agreed value of Rs. 80,000 the original cost of which
was Rs. 1,00,000 and accumulated depreciation was Rs. 20,000.Zulfi invested
merchandise costing Rs. 40,000 at an agreed value of Rs. 50,000 along with his
supplier, credit value Rs. 10,000 and sufficient cash to make his Capital equal
to Mobeen.
Required:
i. Prepare Journal Entries to record the partner’s investment.
ii. Prepare initial balance sheet of the partnership firm.

Q.5 b) P,Q and R are the equal partners with Rs. 1,00,000 each made investment
in the firm. R decided to retire. He is paid Rs. 1,0,000 (Goodwill of the firm to
be recorded)
REQUIRED:
Prepare Journal Entries and computation for recording the retirement of R.

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Q.6. ACCOUNTS RECEIVABLE:

The following data are taken from the AFAQI Traders:
Dec. 31 2001 Dec.312002
Accounts Receivable 70,000 156,700
Allowance for Bad Debts (CR) 300
Allowance for Bad Debts (CR) (balance before adjustment) 5,000
During the year the following transactions were performed
a) Sales on account Rs. 240,000.
b) Accounts Receivable written off as uncollectible Rs. 3,300
c) Previously written off accounts receivable Rs. 8,000
d) Cash Collected from customers Rs. 150,000
Required:
i. Prepare Journal Entries to record the above transactions.
ii. Give an adjusting entry, assuming Afaqi Traders estimate the uncollectibles
at 3% of Credit Sales.
iii. Give an adjusting entry assuming Afaqi Traders estimate the Bad Debts
at 10% of accounts receivable at end.
iv. Prepare Partial balance sheets showing accounts receivable and related
allowance for Bad Debts on December 31, 2002 under both the
approaches. Show Computation.

7. INVENTORY VALUATION:
The following data are taken from MIRZA TRADING CO. at Dec. 31, 2002
January 01, Balance 09 units @ Rs. 500 each.
April 12 Purchased 10 units @ Rs. 550 each.
August 17 Sold 08 units.
October 21 Purchased 10 units @ Rs. 600 each.
December 28 Sold 09 units.

REQUIRED:
(a) Using FIFO Periodic:
i. Compute the Cost of ending inventory at Dec 31, 2002.
ii. Compute the Cost of goods Sold for the year ended Dec 31, 2002.
iii. Prepare Journal entries to record purchases and the year end Adjusting
entry using Cost of goods sold.
(b) Using FIFO Perpetual
i. Prepare the inventory card ingood form
ii. Give an entry to adjust Inventory at December 31, 2002.
9. DEPRECIATION:
On April 02, 1999 the Global Company acquired equipment. It has estimated
useful life of 3 years with salvage value Rs. 5,000the following expenditure
were incurred on it. (The accounting year ends on December 31)
1. Billed Price Rs. 2,75,000.
2. Freight Charges Rs. 2,000 and Transit Insurance Rs. 3,000.
3. Installation Expenses Rs. 25,000
4. Three years Fire Insurance Rs. 15,000.

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REQUIRED:
a) Compute the Cost of Equipment
b) Give the general enteries from 1 to 4 above.
c) Company used Straight Line Method. Compute the depreciation expenses
and Accumulated Depreciation for the whole life of the asset.
d) Assume that the equipment was traded in with another equipment, costing
Rs. 4,00,000 on December 31 2001. The trade in allowance was Rs. 50,000
and balance to be paid in cash.
NOTE: Gain or Loss is not to be recognized. Give the entries and computation.

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ACCOUNTING 2002 REGULAR & PRIVATE

Time: 3Hours Max.Marks:100
Instructions: Attempt FIVE questions, all questions carry equal marks.

Q.1 (a) Explain the following PRINCIPLES/CONCEPTS:

1. Business Entity
2. Going-Concern
3. Accrual Basis
4. Consistency

Q.1 (b). Distinguish between the following:

1. Owner’s Equity and Creditor’s Equity.
2. Book Value and Market Value.
3. Trade Discount and Cash Discount.
4. Cash Dividend and Stock Dividend.
Q.2. WORK SHEET:
Given: The selected account balances taken from the ledger of Noman & Co.
on December 31st, 2002 the year end are as follows:
Cash 5,000
Merchandise Inventory 01-01-2002 20,000
Unearned Rent Income 1,900
Accounts Receivable 50,000
Accounts Payable 18,500
Notes Payable 5,000
Allowances for doubtful Debts (Dr.) 1,000
Good Will 7,000
Plant Asset 40,000
Capital 37,800
Purchases 45,000
Sales Revenue 67,000
Interest Expense 200
Salaries Expense 14,000
Supplementary data for Adjustments at December 31, 2002 are as follows
1. The allowance for Doubtful Debts was estimated at 2-1/2% of Accounts
Receivable.
2. Plant Assets are depreciated at 20% using Diminishing Balance method
having a Scrap value of Rs. 5,000.
3. Salaries expense for the year amounted to Rs. 15,000.
4. Unearned Rent at year end amounted to Rs. 1,200.
5. Accrued Interest N/P Rs. 300.
6. Merchandise Inventory on December 31, 2002 was valued at Rs. 25,000
using Periodic System.
7. The cash was found short by Rs. 500.
REQUIRED:
Prepare a Partial Ten-Column Work Sheet. The Column totals are not required.

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3. ADJUSTING AND CLOSING PROCESS:
Given: Take the data given in this paper under Question No. 2
REQUIRED:
Give necessary ADJUSTING, CLOSING & REVERSING Journal Entries in proper
form.

4. COMPANY ACCOUNTING:
Given AL-AZAM LTD entered into the following transactions.
1. Issued 50,000 ordinary shares of Rs. 10 par at Rs. 12 each for cash.
2. Issued 10,000 ordinary shares of Rs. 10 in acquisition of Machinery Costing
Rs. 120,000.
3. Declared Cash Dividend Rs. 150,000 and Stock Dividend of Rs. 200,000. R.E.
account is having sufficient balance.
4. The Bank reported that the cash Dividend in the amount of Rs. 30,000 was
unclaimed.
5. Issued 17,500 ordinary shares of Rs. 10 in settlement of Stock Dividend.
6. Issued to Directors 15,000 shares of Rs. 10 each in recognition of their services
rendered to the Company.
7. Issued 1,000 Debentures of Rs. 100 each at Rs. 110 payable after 5 years at
Rs. 120.
REQUIRED:
Give the necessary journal entries to record the above transactions in proper
form.

Q.5. INVENTORY VALUATION:

Given The following data relate to Riaz & Co.which uses the periodic inventory
system.
January 01, Inventory 8,000 units @ Rs. 4.00 per unit.
January 10, Purchases 20,000 units @ Rs. 4.20 per unit.
January 20, Purchases 30,000 units @ Rs. 4.30 per unit.
January 30, Purchases 10,000 units @ Rs. 4.50 per unit.
January 31, Sold 56,000 units at a uniform selling price of Rs. 8.0 per unit.
REQUIRED:
a) Determine the cost of Ending Inventory by the following methods. (a).
FIFO, (b). LIFO, (c). Weighted Average.
b) Prepare a Comparative Income Statement Showing the Gross Profit under
each of the above methods separately.

Q.6. PARTNERSHIP ADMISSION:

Ahmed and Khalil are partners sharing profits and losses in the ratio 3:2
respectively. Their Balance Sheet on May 31, 2002 shows their capital as under
Ahmed Capital Rs. 60,000
Khalil Capital Rs. 40,000
Mr. Nadir is admitted to the above partnership under the following separate
assumptions.

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1) Mr. Nadir invests Rs. 10,000 cash and Merchandise Inventory costing Rs.
40,000 for a 1/3 interest.
2) Mr. Nadir invests Rs. 1,00,000 cash for a 1/4 interest (Use Good will Method
only).
3) Mr. Nadir invests sufficient cash to have ½ interest.
4) Mr. Nadir purchases 1/3 interest of Mr. Ahmed and 1/4 interest for Mr. Khalil
paying Rs. 50,000 to Mr. Ahmed and Rs. 20,000 to Mr. Khalil.
REQUIRED:
Give the necessary journal entries under each of the above assumptions. Show
necessary computations.

Q.7. PARTNERSHIP PROFIT & LOSS DISTRIBUTION:

Aleem and Faheem are partners sharing profits and losses under the plans
given below:
PLAN – 1
a) Annual salary to partners Rs. 50,000 to Mr. Aleem and Rs. 30,000 to
Mr. Faheem.
b) Commission to Mr. Aleem Rs. 15,000.
c) Balance to be distributed equally.
PLAN – 2
a) Mark-up on Capitals Rs. 18,000 on Mr. Aleem’s Capital and Rs. 60,000 on
Mr. Fahim’s Capital.
b) Annual Salary to partners Rs. 80,000 to Mr. Aleem and Rs. 30,000 to Mr.
Faheem.
c) Balance to be distributed in the ratio of 2:1 respectively. Assume that the
partnership earned a Net Profit for the year in the amount of Rs. 100,000.
REQUIRED:
a) Prepare an Income Distribution Summary under each of the above plans
separately.
b) Give the necessary journal entries under each of the above plans to record
the distribution of Profit between the partners.
Q.8. ACCOUNTING FOR DEPRECIATION:
(a) Distinguish between Capital Expenditures and Revenue Expenditures.
(b)Given Fazil Company purchased a machine on April 01, 2001 at a list price
of Rs. 60,000 with a trade discount at 5%. The credit
terms were 2/10, n/30.
The payment was made within discount period. The company incurred the
following additional expenditure.
1) 4% Sales Tax on the cash price of Machine.
2) Custom duty Rs. 11,000
3) Installation and testing cost Rs. 13,000
4) The Machine was insured against fire and premium paid Rs. 3,500
5) Insurance in transit Rs. 5,000
6) Fright in Rs. 2,500
REQUIRED:
a) Compute the cost of Machine

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b) Compute the Depreciable cost and Depreciation charge for the year ended
2001 and 2002 using Straight Line Method assuming that the machine
was estimated to have an operating life of 10 years and a scrap value of
Rs. 2,780.
c) Give the necessary journal entries on Dec 31, 2001.
d) Prepare a Partial Balance Sheet showing the machine cost and its allowance
for Depreciation as on December 31, 2002.

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ACCOUNTING 2001 REGULAR & PRIVATE

Time: 3Hours Max. Marks: 100

Instructions: Attempt any FIVE questions.

Q.1. WORK SHEET:
The following is the Pre-Closing trial balance of Nadir Company on Dec 31, 2000.
Debit Credit
Cash 30,000
Accounts receivable 90,000
Allowance for Bad Debts 1,000
Merchandise Inventory 60,000
Prepaid-Insurance 6,000
Building 230,000
Allowance for Depreciation Building 30,000
Accounting Payable 71,000
Capital 250,000
Drawings 20,000
Sales 343,000
Sales Return & Allowance 3,000
Commission Income 72,000
Cost of Goods Sold 230,000
Salaries Expense 50,000
Rent Expense 30,000
Supplies Expense 16,000

Data for Adjustment at December 31, 2000.

1. Insurance was prepaid to the extent of Rs. 1,500.
2. The Allowance for Bad Debts was estimated at the rate of 3% of the year
and Accounts Receivable Balance.
3. Depreciation expense is estimated at the rate of 20% on declining balance.
4. Commissions Income is unearned to the extent of Rs. 27,000.
5. Salaries Expense for the year amounted to Rs. 50,000.
6. Rent Expense for the year amounted to Rs. 27,000.
7. Supplies consumed during the year Rs. 13,000.
REQUIRED:
Prepare a Ten Column work sheet.

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Q.2 (a) INCOME STATEMENT AND CLOSING ENTRIES
The following is an alphabetical list of the selected balances of Mirza Sports
Shop on September 30, 2001.
Depreciation Expense: Equipment 500
Inventory October 01, 2000 22,500
Purchases 75,000
Purchase Discount 1,500
Purchase Return & Allowances 2,500
Rent Expense 6,000
Salaries Expense 9,000
Sales 115,000
Sales Discount 2,100
Sales Return & Allowances 3,900
Supplies Expense 800
Transportation In 4,200
Ending Inventory is valued at Rs. 25,800
REQUIRED:
a) Prepare a Multiple Step income statement
b) Prepare Closing Entries.

Q.2 (b) ERRORS AND THEIR RECTIFICATION

Two errors in the preceding year accounting records Mirza Sports Shop have
been detected in the following year.
1. Depreciation was under changed by Rs. 300.
2. Accrued Salaries Expense of Rs. 600 was over looked.
REQUIRED:
1. Give Necessary rectifying entries.
2. Compute the correct amount of net income for preceding year.

Q.3. CASH CONTROL: BANK RECONCILIATION

The accountant of NAWAZ COMPANY has extracted the following data from its
cash records and bank statement.
a) The cash in Bank account has a debit balance of Rs. 32,400 August 31, 2001,
while the bank statement showed a credit of Rs. 25,700 on the same data.
b) The following items were not recorded in the Company Books:
i. Profit Credited by the bank Rs. 750.
ii. Direct deposit by the bank Rs. 4,100.
iii. Divided collections by the bank on behalf of NAWAZ COMPANY Rs. 1,210.
iv. Bank service charges Rs. 160.
v. Dishonored cheque of a customer Rs. 1,250.
vi. Promissory note paid by the bank on behalf of NAWAZ COMPANY Rs. 4,000
(including interest Rs. 500).
c) The following items were not recorded by the bank.
i. Outstanding cheque Rs. 1,140.
ii. Deposit in transit Rs. 8,320.
d) Comparison of the cash in Bank account with the bank statement revealed
the following errors.

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i. Cheque drawn by NIAZ COMPANY was debited by the bank to the account
of NAWAZ COMPANY Rs. 440.
ii. A cheque for Rs. 360 issued in payment of repair expense was credited by
th e Company accountant as for Rs.630.
REQUIRED:
1. Prepare a Bank Reconciliation for NAWAZ COMPANY.
2. Prepare general journal entries to adjust the accounts assuming that the
accounts have not been closed.
Q.4 (a) ACCOUNTING FOR ACCOUNTS RECEIVABLE
On March 31, 2001 MUSHARRAF CORPORATION LTD. estimated allowance for
bad debts at 10% of accounts receivable of Rs. 90,000.
REQUIRED:
Give adjusting entry in each of the following cases, the case requiring no entry
be explained assuming that the Allowance for Bad Debts account, prior to
adjustment has:
i. Debit balance of Rs. 3,000
ii. No balance
iii. Credit balance of Rs. 4,000
iv. Credit balance of Rs. 9,000
v. Credit balance of Rs. 12,000

4 (b)During the year Junejo Sons wrote off worthless accounts of Rs. 15,000
and recovered in full a previously written off account of Rs. 5,000. At year end
the accounts receivable subsidiary ledger revealed a credit balance of Rs. 1,000
in a customer’s account.
REQUIRED:
Record the above facts in general journal.
4 (c). What does the following balance indicate?
I. A debit balance in Allowance for bad debts account?
ii. A credit balance in a customer’s account?

Q.5. INVENTORY VALUATION

On January 01, 2001 ZIA TRADING COMPANY had 8,000 units in inventory
costing Rs. 120,000. During the period ended June 30, purchases were made
a follows.
February 04 1,500 units @ Rs. 16
April 02 2,500 units @ Rs. 18
May 31 6,000 units @ Rs. 19
Sales made during the period ended June 30, are as under
January 10 Sold 4,000 units at Rs. 20 per unit
February 06 Sold 1,000 units at Rs. 21 per unit
April 15 Sold 2,000 units at Rs. 22 per unit
June 16 Sold 4,000 units at Rs. 23 per unit
REQUIRED
Determine the cost of ending inventory and cost of goods sold at June 30,
assuming that the business uses the perpetual inventory system and MOVING
AVERAGE METHOD for inventory valuation.

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Q.6. DEPRECIATION
On January 05, 2000 Lagari Company paid Rs. 18,000 for extra-ordinary repair
of equipment costing Rs. 100,000 and having accumulated depreciation of Rs.
45,000. This equipment was estimated to have a useful life of 4 years from the
date of repair and a salvage value of Rs. 9,000. On June 22, 2001 the equipment
was sold for Rs. 36,000 cash. LAGHARI COMPANY follows calendar year as its
accounting period.
REQUIRED:
1. Give general journal entry to record extra-ordinary repairs.
2. Determine depreciation per year after extra-ordinary repairs by straight line
method.
3. Show the equipment and its accumulated depreciation on a partial balance
sheet on December 31, 2000.
4. Determine the amount of loss or gain on sale of equipment.
5. Give journal entries to record sale of the equipment.

Q.7. PARTNERSHIP – LIQUIDATION

PEE AND COMPANY Balance sheet November 30, 2001
Cash Rs. 30,000 Liabilities Rs. 60,000
Other Assets 150,000 Pee Capital Rs. 50,000
Tee Capital Rs. 40,000
Cee Capital Rs. 30,000
180,000 180,000
Pee, Tee and Cee share profit and loss in 3:2:1 ratio respectively. At November
30, they liquidate their partnership business. Other assets are sold for
Rs. 24,000 liabilities are paid in full. Cee is personally solvent. Pee and Tee are
both personally insolvent.
REQUIRED:
1. Determine and distribute Loss or Gain on Realization and also capital
deficiencies, if any.
2. Prepare a Liquidation Summary.
3. Give all the necessary entries in general journal to record the Liquidation
proceedings.

8. PARTNERSHIP ADMISSION:
A and B are partners with capitals Rs. 50,000 each and share profit of loss
equally. They admit C as new partner. Pass entries in general journal to record
C’s admission under each of the following independent assumptions showing
necessary computations.
a). C purchases one-half (1/2) of each old partner’s capital paying each Rs.
35,000 cash.
b). C invests Rs. 50,000 for a 1/4th interest in capital C is given credit for the
entries amount of his investment.
c). C invests Rs. 50,000 for a 1/2 interest in capital. Total Capital to be increased
only by C’s investment.
d). C invests Rs. 20,000 for a 1/4th interest in capital and the total capital is
to be Rs. 1,30,000.

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Q.9. COMPANY ACCOUNTING

The following transactions relate to Bhutto Limited.
a). Received applications for 1,00,000 ordinary shares of Rs. 10 each. Issued
allotment letters for 80,000 shares and refunded the excess application
money.
b). Issued 6,000 ordinary shares of Rs. 10 each at a market price of Rs. 12 per
share for acquiring land.
c). Issued ordinary shares of Rs. 10 each at a premium of Rs. 2 per share in
settlement of bonds payable of Rs. 60,000.
d). Declared cash dividend of Rs. 30,000 and stock dividend of Rs. 50,000.
e). Appropriated Rs. 1,50,000 for contingencies.
f). Issued ordinary shares of Rs. 10 each in payment of stock dividend of Rs.
50,000.
g). Issued dividend Warrants in payment of cash dividend of Rs. 30,000.
h). Recorded unclaimed dividend of Rs. 5,000 as per bank statement.
REQUIRED:
Give general journal entries for the above transactions.

Q.10 THEORY
a. What do you understand by “I.A.S”?
b . Describe the qualitative characteristics of financial statements as specified
by IAS.

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ACCOUNTING 2000 REGULAR & PRIVATE

Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.
Q.1. WORK SHEET:
Given Presented below is the unadjusted Trial Balance of Hassan Traders at
Dec 31, 1999.
Debit Credit
Cash 1,250
Accounts Receivable 11,000
Allowance for doubtful account 500
Merchandise Inventory 12,000
Unexpired insurance 1,700
Plant assets 45,000
Allowance for Depreciation (Plant Assets) 15,000
15% Notes Payable (due in 2003) 20,000
Capital – Hassan 35,000
Drawings –Hassan 2,000
Sales Revenue 22,500
Cost of Goods sold 12,300
Office Supplies Expense 2,500
Salaries expense 4,250
Data for Adjustments:
a) Insurance expired during the year amounted to Rs. 700.
b) Provide doubtful debts at 10% of accounts receivable.
c) Interest is paid annually on the notes payable at June 30, each year.
d) Office Supplies used amounted to Rs. 500.
e) Charged depreciation on plant assets at 20% on reducing balance method.
f) Salaries prepaid amounted to Rs. 850.
REQUIRED:
Prepare a Ten Column Work Sheet in proper form and complete in all respect.
or
ADJUSTING AND CLOSING JOURNAL ENTRIES
Given:
Before making any year end adjustingentries the total revenues of Aslam &
Co. exceeded total expenses by Rs. 60,000/-. However the following adjustments
are necessary.
1. Office Supplies used Rs. 350, recorded initially as asset.
2. Service rendered to clients but yet not billed Rs. 2,700.
3. Interest accrued on notes payable Rs. 1,350.
4. Depreciation Rs. 50.
5. Accrued wages payable Rs. 3,250.
6. Fees collected in advance which have not been earned Rs. 4,300 recorded
initially as liability.
7. The Company is subject to Income tax at 40% of income before Income Taxes
(Assume Income before income taxes (Assume Income before income taxes is
the same as taxable income).

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REQUIRED:
1. Give the necessary adjusting and closing general entries for the above data.
2. Prepare Profit and Loss Summary accounts.
3. Compute the Net Income after the above adjustments.
Q.2. BANK RECONCILIATION STATEMENT
The following information pertains to Salim & Co.
1. The balance on May 31 Bank Statement is Rs. 16,870 (Cr.)
2. Withdrawal of Cash Rs. 90 from bank for personal use by Salim has not been
recorded in Cash Book.
3. Cheques issued by Salim that have not yet been paid by the bank total Rs.
3,160.
4. The cheques of Rs. 28 to pay for freight was wrongly recorded on Cash Book
as Rs. 82.
5. A deposit for Rs. 1,496 was made on May 31st which does not appear on
Bank statement.
6. Issued a cheque for Rs. 5,885 to pay for merchandise purchase. The bank
statement showed payment of correct amount but it was erroneously
recorded on cash book as Rs. 8,585.
7. A customer’s cheque for Rs. 58 was returned with the remarks N.S.F.
8. Deposited a customer’s cheque Rs. 9,640 was shown on the bank statement
as Rs. 6,940.
9. The bank collect for Salim Rs. 1,760 including interest Rs. 160 on a note left
for collection.
Cash in Bank
May 01, Balance 2,540 May 31, Withdraws Rs. 28,400
May 31, Deposits 39,400
REQUIRED:
1. A bank reconciliation statement and compute the ADJUSTED BALANCES of
Cash in Bank.
2. Give the necessary ADJUSTING JOURNAL ENTRIES.
3. Compute bank balances as per Cash Book at May 31.
Q.3. INVENTORY VALUATION
Given:
Following data are obtained from the record of Karim & Sons.
UNITS SOLD UNITS PURCHASE COST PER UNIT
Dec 01 Inventory – 9 Rs. 50
Dec 12 Credit Purchased – 10 55
Dec 17 Sales 8 – -
Dec 21 Cash Purchased – 10 60
Dec 28 Sales 9 – -
REQUIRED:
1. Calculate the cost of inventory at December 31, and cost of goods sold under
the periodic system and LIFO method.
2. Calculate the cost of inventory at December 31, and cost of goods sold under
perpetual system and FIFO method.
3. Give the necessary ADJUSTING JOURNAL ENTRIES under both the system
separately.

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Q.4. ACCOUNTING FOR RECEIVABLES

Ahmed Trading Co. estimates uncollectable accounts at 10% of year end balance
of Accounts Receivable in December 31, 1998 the A/R (Control) had a Dr.
balance of Rs. 75,000/= and the Allowance for Doubtful accounts showed a
Credit balance of Rs. 2,500/= but a customer’s account in the subsidiary ledger
showed a credit balance of Rs. 4,800/=. However on January 05, 1999 the Co.
sold merchandise at invoice price of Rs. 20,000/= to the customer who had
paid Rs. 4,800/= in advance. Collected on Receivable Rs. 215,000/= this is the
cash received after discount deductions of Rs. 4,400/=. During the year, total
A/R written off Rs. 15,000/= and the previously written off A/R recovered in
the amount of Rs. 6,500/= at December 31, 1999.

REQUIRED:
1. Give entries in General Journal to record Bad Debts expense and advance
from Customer at December 31, 1998.
2. Give entries in General Journal to record all transactions completed during
1999. Including adjusting entry to record Bad Debts expense.
3. Report relevant account balances on Balance Sheet as of December 31,
1999.

Q.5 a). ACCOUNTING FOR DEPRECIATION

Given XY COMPANY acquired a Computer on July 01, 1998 at a Cost of
Rs. 50,000/= its operating life was estimated as 5 years with salvage value of
Rs. 5,000/=. The Company’s accounting year ends on December 31.
Required:
Calculate the Depreciation Cost & Depreciation charge on the computer for
the years ended December 31, 1998 and 1999 under each of the following
method separately.
1. Straight Line.
2. Reducing Balance (Rate 20%).
3. Sum of the years digits.

Q.5 (b). GIVEN:

Equipment which cost Rs. 6,000/= had an estimated useful fill of 6 years and
estimated salvage value of Rs. 600/= Straight Line depreciation was used.

REQUIRED:
Prepare the Journal entries to record the disposal of the equipment under
each of the following assumptions.
1. The equipment was sold for Rs. 4,000/= cash after 2 year’s use.
2. After three year’s use the equipment was sold for Rs. 3,500/= cash.
3. After 4 year’s use the equipment was traded in on a single equipment with
a fair market value of Rs. 8,000/= the trade in allowance was Rs. 3,100/=

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Q.6 VOUCHER SYSTEM:

M & N Co. uses the Voucher System. Selected transactions for November are
presented below.
1. Issued a non-interest bearing note for Rs. 7,500/= in settlement of voucher
payable for Rs. 7,000/=
2. Issued a 12% 60 days note in settlement of an outstanding voucher for Rs.
8,000/=
3. Issued cheques for Rs. 2,500/= to establish petty cash fund.
4. Purchased merchandise from Tahir Traders for Rs. 8,500/= on terms 3/10, n/30.
5. Purchased a computer for Rs. 18,000/= paying Rs. 8,000/= and signing a note
for the balance.
6. Issued a Debit memo to Tahir Traders for Rs. 500/= for return of defective
merchandise.
7. Issued a cheque for Rs. 2,500/= to increase the Petty Cash fund to replenish
the fund for postage expense Rs. 1,200/= Entertainment expenses Rs. 900/=
and miscellaneous expenses Rs. 400/=
8. Issued a 10% 30 days note for Rs. 3,000/= and paid Rs. 3,500/= in settlement
of a voucher payable for Rs. 6,000/=
REQUIRED:
Using general journal forms show how the above transactions would be recorded
in Voucher Register, Cheque Register and General Journal.

Q.7 ACCOUNTING CONCEPTS AND PRINCIPLES

(a) Indicate in each case whether or not the item has been handled in accordance
with Generally Accepted Accounting Principles. If so indicate which of the
basic concept principle has been followed. If not indicate which
concept/principle has been violated and why? Explain in one or two
sentences.
1. Included on the Balance Sheet of the Swift shop is the personal Automobile
of Mateen the Owner.
2. Each year the Sheeraz Co. values are investment in Land at the current
market price.
3. Feroz Company makes furniture. The cost of particular Chair is Rs. 35.
However when the inventory figure is computed for the Balance Sheet the
amount used for this chair is Rs. 68 which is normal selling price.
4. Samad Co. owns office equipment that was purchased seven years ago. It
is still carried in the firm accounting records at the original cost. No
depreciation has ever been taken on the equipment.
(b) State the effects on Income Statement and Balance Sheet if revenue
expenditure was wrongly treated as Capital expenditure.
(c) Define GAAP and enumerate at least four of these.

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Q.8. ACCOUNTING FOR COMPANIES:

The shareholders equity section of Balance Sheet of Waseem Ltd as on June
30, 2000 was as under:
Authorized Capital (2,00,000 shares of Rs. 10 par) 2,000,000
Paid-up Capital 90,000 shares of Rs. 10 par 900,000
Premium on Shares 180,000
Retained Earnings 520,000
Reserve for Building Extension 150,000
During the quarter ended September 30, the Company performed the following
transactions in addition to normal business.
1. The Company received applications along with application money for 80,000
shares in response to the issue of 100,000 shares of 10 par at Rs. 15/= to
the public. The Board of directors finalized the allotment by allotting 80,000
shares to the Publicand 20,000 shares to the under writers.
2. Closed the reserve for building extension account as the purpose is over.
3. A Computer costing Rs. 90,000 was acquired by allotting 7,000 shares of
Rs. 10/= par.
4. Purchases a fax machine for Rs. 75,000 by allotting shares at the price of
Rs. 12.50 per share as quoted at the stock exchange.
5. Issued 5,000/= 10% 5 year bonds of Rs. 100 par for cash to be redeemed at
Rs. 110 at maturity.
6. Created a reserve for redemption of bonds by Rs. 40,000.
7. Declared interim stock dividend of Rs. 150,000 and cash dividend of Rs.
200,000.
8. Allotted shares of Rs. 10 per at premium of Rs. 5 per share in settlement
of the Stock dividend.
REQUIRED:
1. Record the above transaction in General Journal.
2. Prepare a partial Balance Sheet reporting the above facts.

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ACCOUNTING 1999 REGULAR & PRIVATE
Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.
Q.1. WORK SHEET
Following is the Pre-Closing Trial Balance of Adnan & Co. on Dec 31, 1998.
Debit Credit
Cash 20,000
Accounts Receivable 30,000
Allowance for Doubtful Debts 500
Merchandise Inventory 20,000
Prepaid Advertising 10,000
Equipments 40,000
Allowance for Depreciation Equipment 2,500
Accounts Payable 10,000
Adnan – Capital 50,000
Commission Income 10,000
Sales 200,000
Cost of Goods Sold 123,000
Salaries Expense 15,000
Office Supplies Expense 5,000
Rent Expense 6,400
Insurance Expense 3,600
273,000 273,000
Data for Adjustments on December 31st, 1998
1. Office Supplies used Rs. 2,000.
2. Salaries expense for the year amounted to Rs. 12,000.
3. Commission earned during the year Rs. 8,000
4. Prepaid advertising Rs. 4,000
5. Rent Expense for the year amount to Rs. 8,000.
6. Insurance expense represents a 3 year insurance policy paid on August 01,
1998.
7. Depreciation on equipment was estimated Rs. 1,000.
8. Doubtful debts on accounts receivable was estimated at Rs. 1,000.
REQUIRED:
Prepare a Ten Column WORKSHEET for the year ended December 31, 1998
from the above balances and data for adjustments and complete in all respect.
Q.2. ADJUSTING, CLOSING REVERSING AND OPENING JOURNAL ENTRIES
REQUIRED:
Take data given in Question No.1 of this paper.
a. Give the necessary Adjusting and Closing Journal Entries as on December
31, 1998 in proper form.
b. Give the necessary Reversing Journal Entries as on January 01, 1999 in
proper form.
c. Give the necessary Opening Journal Entry in proper form as on January
01, 1999.
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Q.3 INVENTORY VALUATION
Given On the Book of PAK ENTERPRISES on July 01, 1998 the merchandise
inventory account had a balance of Rs. 62,300. During July 1988 the following
transactions took place.
July 10 Purchases merchandise on credit for Rs. 11,950.
July 25 Sold merchandise on account for Rs. 18,400 costing Rs. 13,600.

REQUIRED:
Using the perpetual system
1. Give the necessary dated journal entries in proper form of the above
transactions.
2. Give the necessary adjusting & closing journal entries in proper from as
on July 31, 1998.
3. Prepare Partial Income Statement for the month ended July 31, 1998.

Q. 3 (b) During a period of consistent rising cost of purchases which inventory

flow cost assumption yields the lowest cost of Goods sold and the highest net
profit?

Q.4 (a) ACCOUNTS RECEIVABLE

Accounts Receivable control in the General Ledger is showing a debit balance
of Rs. 27,000 representing of 25 customers. There are 24 customers having
debit balances and one customer having credit balance of Rs. 3,000.

REQUIRED;
Prepare a Partial Balance Sheet reporting the above information.

Q. 4 (b) The following information is available in respect of three different

companies. Company 1 Company 2 Company 3
Balance of A/R as on June 30, 1998 100,000 87,500 187,500
Balance of Allowance for Doubtful 7,500 10,000 7,500
debts as on July 01, 1997
A/R written of during the year 5,000 12,500 5,000
Application rate of Doubtful Debts 2.5% 3.0% 2.0%
REQUIRED:
1. Compute the amounts of Doubtful Debts for each of the above three
companies separately.
2. Give the necessary adjusting journal entries for each of the above three
companies separately as on June 30, 1998.
3. Assume that the amount written off is recovered from A/R of Company
(3), give the necessary journal entries to record the recovery.

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Q.5 (a) DEPRECIATION
Define Depreciation, amortization and depletion from the view point of
accounting. Give one example of the assets which are subject to depreciation,
amortization and depletion.
Q.5 (b) On July 01, 1995 Noorani Company purchases a machine at a list price
of Rs. 400,000 subject to a trade discount of 5%. The Company paid transportation
charges Rs. 15,000 and installation charges Rs. 5,000. The machine had estimated
life of 10 years and scrap value Rs. 10,000. The Company had been using SUM-
OF-THE-YEAR DIGITS METHOD for computing depreciation. The accounts of the
company are closed on December 31 each year. On July 01, 1998 the machine
was trade in with a new one having a market value of Rs. 300,000. The trade
in allowance of the old machine was agreed at Rs. 150,000 and balance was
paid in cash.
REQUIRED:
1. Compute the cost of machine and depreciable cost of machine.
2. Compute the depreciation charge for the years ended December 31, 1995,
1996, 1997 and July 01, 1998.
3. Prepare Journal entries in proper form to record the purchase of machine
depreciation from December 31, 1995 to July 01, 1998 and the exchange
of machine (loss or gain is recognized) as on July 01, 1998.

Q.6. COMPANY ISSUANCE OF SHARES AND DEBENTURES

Karim Company Ltd. completed the following transactions.
1. The Company issued 70,000 share of Rs. 10 each at Rs. 12 but received
applications for 80,000 shares. The Company finalized the allotment and
refunded the excess amount.
2. The Company purchased a running business and acquired the following
assets and liabilities:
Merchandise Inventory Rs. 15,000 Office Equipment Rs. 50,000 Machinery
Rs. 40,000, Account Payable Rs. 5,000. Purchase consideration and the
above business was paid by issue of 9,000 shares of Rs. 10 each fully paid
up.
3. Purchased a machine worth Rs. 2,00,000 and in consideration issued shares
of Rs. 10 each. Each share had a market value of
Rs. 12.50.
4. Purchased Office Equipment and in consideration issued 10,000 shares of
Rs. 10 each. The market value of the share was Rs.
13.
5. Issued 2,000 10% debenture of Rs. 100 each at Rs. 95 redeemable after
five years at Rs. 105.
6. The Company declared stock dividend Rs. 50,000 and issued 4,500 shares
of Rs. 10 each.

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Q.7 (a) VOUCHER SYSTEM
Rehman & Company recorded in July Voucher No. 51 to Shaheen Company for
Rs. 3,000 in respect of purchase of machine which remained unpaid at the end
of July. In August it was found that the invoice had been incorrectly recorded
and the correct amount was Rs. 3,500.

REQUIRED:
How this error should be corrected in the books of Rehman & Company?

Q.8 ACCOUNTING EQUATION:

(a) Why are assets recorded on the left hand side in the ACCOUNTING
EQUATION?
(b) State the source of positive rules of recording ASSETS and EQUITIES.
(c) State with source of negative rules of recording ASSETS and EQUITIES.
(d) State the Two main BASES OF ACCOUNTING. Give one example of
uncommon item of recognizing revenue under each.

Q.8 (b) The following errors were discovered before closing the books of
accounts.
a. Accrued Rent Expense of 2,200 was recorded by debiting rent payable and
crediting rent expense.
b. A recovery of Rs. 5,600 was made from a customer Mr. Abid was recorded
by debiting cash and crediting A/R Mr. Abid Accounts only.
REQUIRED:
1. State the effects of the above errors over the specific items of Income
Statement and Balance Sheet of the current year.
2. Give the necessary CORRECTING JOURNAL ENTRIES in proper form of the
above errors.
3. Assume that the Net Income before the above errors was Rs. 20,000.
Compute the amount of corrected net income.

Q.9 (a) Define the terms CONCEPT, PRINCIPLE and ASSUMPTION from the view
point of Accounting.

Q.9 (b) Define Generally Accepted Accounting Principles (GAAP).

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ACCOUNTING 1998 REGULAR

Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.

Q.1. WORK SHEET:

Following is the pre-closing trial balance of Falcon Traders trial balance July 31,
1997.
Debit Credit
Cash 4,755
Accounts Receivable 2,000
Merchandise Inventory 2,700
Unexpired Insurance 486
Advertising Supplies Expense 835
Office Equipment 8,520
Accumulated Depreciation (Office Equipment) 276
Accounts Payable 4,800
RH Capital 13,140
Cost of Goods Sold 4,600 8,580
Office Salaries Expense 2,000
Sales Discount 500
Sales Return 400
Total 26,796 26,796
ADJUSTMENT DATA:-
1. Insurance Expense for the month Rs. 18.
2. Advertising supplies on hand July 31 Rs. 507.
3. Depreciation on Equipment Rs. 75.
4. Salaries earned by employees but yet not paid Rs. 200 and salaries prepaid
Rs. 150.
5. Provide for bad debts at 10% of Accounts Receivable
REQUIRED:
Prepare a 10-column Work Sheet from the above data.

Q.2. ADJUSTING, CLOSING AND REVERSING ENTRIES

Given:
Take the data as given in Question No. 1 of this paper and also consider the
data for adjustment.
REQUIRED:
Give the adjusting, closing and reversing entries and narrate the entries.

Q.3. DEPRECIATION:
(a). Explain the methods of depreciation based on Acceleration principle.

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Q.3.(b) Given Ahmed Company purchased machine for Rs. 1,10,000 on January
01, 1995 and estimated its life to be 10 years and scrap Rs. 10,000.
REQUIRED:
i. Calculate depreciation on machine for the years ended June 30, 1995 and
1996 using Straight Line Depreciation Method.
ii. Give Adjusting Entries for the years ended June 30, 1995 and 1996.

Q.3 (c) Given ABC Company furnishes following balances on January 01, 1996.
Equipment Cost Rs. 150,000 (A/C Balance)
Allowance for Depreciation Rs. 50,000.
The Company uses sum of years digits method. The equipment has no salvage
value.
REQUIRED:
i. Calculate depreciation for the year ended December 31st 1996. Assuming
the equipment estimated to have an operating life of five years.
ii. Set up allowance for Depreciation account for Equipment for the year ended
December 31, 1996 and make posting Balance and rule of the account.

Q.4. ISSUE OF SHARE & DEBENTURES:

1. 45,000 share of Rs. 10 each were issued and subscribed at Rs. 9/= per
share.
2. The Company allotted share of Rs. 10 each in consideration of Stock
Dividend payable Rs. 78,000. The market value of the share was Rs. 13.
3. Directors of the Company allotted shares to the promoters in
consideration of their services values Rs. 45,000, the market value of
shares Rs. 15/=.
4. Issued 40,000 shares of Rs. 10 each for the purchase of a machine
costing Rs. 360,000.
5. Declared cash dividend of Rs. 150,000.
6. The Bank reported the amount of dividend paid Rs. 130,000 and
unclaimed dividend Rs. 20,000.
REQUIRED:
Give entries to record the above transactions giving necessary explanation.

Q.5 (a) ACCOUNTS RECEIVABLE

Delta Company furnishes the following account balances year ended June 30,
1998.
Balances: Accounts Receivable Rs. 250,000 (Including past due accounts
Rs. 50,000).
Allowance for Doubtful A/C (Dr.) Rs. 2,500, Sales Rs. 580,000 (Including
Cash Sales Rs. 180,000)
REQUIRED:
1. Calculate Bad Debts Expense using balance sheet approach @ 2% of not yet
due Account Receivable and 5% of the past due A/R.
2. Calculate Bad Debts Expense @ 1.5% of Credit Sales.

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Q.5.b) Fast Company reports the following transactions for the half year ended
June 30, 1998.
i. Credit Sales Rs. 430,000
ii. Sales Return Allowance Rs. 15,000
iii. Sales Discount 5,000
iv. A/C recovered Rs. 4,000
v. A/R written off Rs. 12,000
vi. Advances by Customers as known through the subsidiary ledger Rs. 6,000
vii. Provide for bad debts @ 4% of Sales.
REQUIRED:
Record the above transactions and give also the adjusting entries for bad debts.

Q.6 Friends Stores uses a perpetual inventory system and FIFO method of
inventory valuation, following are data concerning purchases and sales of
merchandise during the month of January 1998:
Quantity Rate Per Unit
January 98 Merchandise Inventory 1,000 Rs. 12/unit
January 05 Purchases 1,200 Rs. 13/unit
January 08 Sales 1,300 Rs. 18/unit
January 15 Purchases 2,000 Rs. 14/unit
January 18 Sales 1,800 Rs. 20/unit
January 25 Purchases 3,000 Rs. 15/unit
January 26 Sales 1,200 Rs. 21/unit
January 30 Purchases 2,500 Rs. 15/unit
January 31 Sales 2,100 Rs. 22/unit

REQUIRED:
(i) Cost of Inventory at January 31st
(ii) Set up T accounts for Merchandise Inventory and make all the postings
and balance the account

Q.7 Nawaz Traders reports the following balances at October 31st, 1998
Balances per Bank Statement Rs. 12,000
Balances per Cash Book Rs. 8,000
Following are the differences in between the balances as per Cash Book and
Bank Statement:
(i) Cheques issued but not paid Rs. 2,000
(ii) Cheques deposited but not yet cleared Rs. 3,000
(iii) Bank collected a note receivable for Rs. 4,000 but not recorded in Cash Book.
(iv) Cheques issued and paid by bank but not recorded in Cash Book Rs. 2,000.
(v) Cheques deposited by a customer directly into the bank but not recorded
in the Cash Book Rs. 2,000
(vi) Deposited a cheque into the bank for Rs. 2,000 but mistakenly recorded
in Cash Book as for Rs. 1,000
REQUIRED:
(i) Prepare a Bank Reconciliation Statement for the month ended October
31st, 1998, correcting the two balances.
(ii) Give also the necessary adjusting entries.

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Q.8. Write short notes on any THREE of the following.
1. Modaraba
2. Musharka
3. Name various books of Original Entry
4. Sources of Finance for a Joint Stock Company

(a) Modaraba
Not included in course
(b) Musharka
Not included in course
(c) Book Of original Entry
Business transactions are not entered straightway in their respective accounts,

Q.9 (a) Trace out the effects of over statement of merchandise inventory ending
on the following items of Income statement and Balance Sheet for the year
ended.
1. Cost of Goods Sold
2. Net Income
3. Current Assets
4. Owner’s Equity

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ACCOUNTING 1998 PRIVATE
Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.
Q.1. WORK SHEET:
The following are unadjusted balance taken from the books from Mr. Shaukat
on March 31, 1998.
Debit Credit
Cash 5,000
Accounts Receivable 12,000
Merchandise Inventory (01-04-97) 10,000
Prepaid Insurance 4,000
Office Equipment 50,000
Allowance for Depreciation (Office Equipment) 10,000
Accounts Payable 8,000
Capital - Shoukat 52,300
Drawing - Shoukat 6,000
Sales 80,000
Sales Discount 4,000
Purchases 40,000
Purchase Return & Allowances 5,000
Transportation in 5,800
Advertising Expense 8,500
Salaries Expense 10,000
Total 155,300 155,300
ADJUSTMENT DATA:-
1. Make Allowance for doubtful accounts at 10% of Accounts Receivable at year end.
2.Insurance expired by Rs. 2,500.
3. Record for Depreciation on Office Equipment Rs. 2,000.
4. Advertising Prepaid was Rs. 1,200.
5. Unpaid Salaries were Rs. 2,000.
6. Merchandise Inventory on March 31, 1998 Rs. 15,000.
REQUIRED:
Prepare a 10 - column Work Sheet from the above data.

Q.2. ADJUSTING, CLOSING AND REVERSING ENTRIES

Given:
Take the data as given in Question No. 1 of this paper.
REQUIRED:
Give the adjusting, closing and reversing entries and narrate the entries on
March 31, 1998 in the General Journal giving explanation below each entry.

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Q.3. VOUCHER SYSTEM
Jawaid Ltd. follows the Voucher System. The following transactions were
incurred during the month of August 1998.
August 01 Purchased Merchandise on Account for Rs. 15,000 Voucher No. 15.
August 05 Defective Merchandise was returned Rs. 500 Voucher No. 16.
August 10 Paid Voucher No. 16 less discount Rs. 250.
August 15 Purchased a machine for Rs. 18,000 paying Rs. 8,000 in Cash
Voucher No. 17 and 18 (Voucher No. 17 for Rs. 8,000 and 18 for
10,000).
August 25 Paid Voucher No. 17.
REQUIRED:
Give entries the Voucher register and the Cash register in the General Journal.

Q.4. ACCOUNT RECEIVABLE

Iqbal & Sons provide allowance for uncollectible at 5% of A/R at end. A/R
Balance Rs. 10,500 and Allowance for uncollectible Rs. 2,000 on Jan 01, 1997
the following transactions were performed.
1. Credit Sales Rs. 45,000
2. Cash Collected from Customer Rs. 20,000.
3. A Customer's account written of Rs. 1,000.
4. Over payment by a customer Rs. 800 which was included in the collection
of A/R.
5. Sales Discount Rs. 600.
REQUIRED:
1. Give Journal entries to record above transactions.
2. Adjusting entry for providing allowance for uncollectible.
3. Prepare Partial Balance Sheet.

Q.5. MERCHANDISE INVENTORY

Records of Rashid Bros Ltd. Show the following data relative to Commodity.
Jan 01 1998 Opening Inventory 1,000 units Rs. 6.00 per unit
Feb 05 1998 Purchases 2,500 units Rs. 5.50 per unit
Mar 12 1998 Purchases 3,500 units Rs. 5.60 per unit
Mar 15 1998 Sales 4,000 units Rs. 9.00 per unit
Apr10 1998 Purchases 4,500 units Rs. 6.00 per unit
May14 1998 Purchases 1,500 units Rs. 8.00 perunit
Jun 30 1998 Sales 4,000 units Rs. 10.00 per unit
REQUIRED:
1. Compute the Cost of Ending Inventory under the Periodic System on June
30, 1998 using the following methods.
(a). FIFO, (b). LIFO, (c). Average Method
2. Give the Adjusting Entries under each method.

Q.6. DEPRECIATION
Afzal & Co. acquired a Computer at a Cost of Rs. 160,000 as on January 1990.
The Computer was depreciated under Straight Line Method with the assumption
of a Five years life and No Salvage Value. After Four years on January 01, 1994
the Computer was traded in with a new model Computer priced at Rs. 200,000.
The Trade in allowance was of Rs. 48,000.

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REQUIRED:
Record the exchange
1. Recognizing Loss or Gain and
2. Without recognizing Loss or Gain.

Q.7. ISSUE OF SHARES AND DEBENTURES

Mand Corporation completed the following transaction for the month of January
1998.
Jan 01 Purchased Land for Rs. 100,000 and in consideration issued Shares
of Rs. 10 each. The market price of the Share was Rs. 12.50.
Jan 05 Purchased Machinery and issued 12,500 shares of Rs. 10 each. The
market price of share was Rs. 12.00.
Jan 10 The Corporation allotted 20,000 shares of Rs. 10 each to the Promoter
in consideration of Services rendered.
Jan 20 The Corporation issued 9,000 shares of Rs. 10 each in full settlement
of Bonds Payable Rs. 100,000.
Jan 25 Issued 1,000 debentures of Rs. 100 each redeemable after five years
at Rs. 105.
Jan 30 Issued 2,000 debentures of Rs. 100 each at Rs. 95 redeemable after
five years.
Jan 31 Paid Preliminary Expenses Rs. 10,000.
REQUIRED:
Give Data Entries in the General Journal with Narration to record the above
transactions.

Q.9. SHORT NOTES

1. Modaraba
2. Musharika
3. Voucher System
4. Steps of Accounting Cycle
5. Accounting Concepts

(v) Accounting Concepts

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ACCOUNTING 1997 REGULAR

Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.
1. ACCOUNTING CONCEPTS AND PRINCIPLES
Define Concept and Principle from the view-point of ACCOUNTING. List out the
different concepts and Principles used in accounting. Also explain any Two
concepts and any Two principles.

Q.2 . WORK SHEET:

The following are unadjusted balance taken from the books from Mr. Khalid
Saeed on June 30, 1997.
Cash 12,800
Merchandise Inventory (01-07-96) 11,200
Accumulated Depreciation -Furniture 3,600
Office supplies 2,000
Accounts Receivable 16,000
Carriage Outward 800
Furniture 10,000
bank Overdraft 7,400
Carriage Inward 1,250
Accounts Payable 12,800
Sales 130,400
Commission Income 4,600
Salaries Expense 19,000
Khalid Saeed’s Capital 42,000
Purchases 89,950
Insurance Expense 1,800
Prepaid Rent 36,000

ADJUSTMENT DATA:-
1. Merchandise Inventory on 30th June 1997, was valued Rs. 15,000.
2. Rent Expired at the rate of Rs. 2,000 p.m.
3. Rs. 3,500 of Salaries in Outstanding.
4. During the year three-fifth office supplies was consumed.
5. One-Forth of the Commission Income was received for the work to be
done next year.
6. Provide Depreciation on Furniture at the rate of 10% of written down
value.
7. Six month's Interest on over draft is due at 18% p.a.
8. Insurance Premium in paid for one year up to 31st March, 1998.

REQUIRED:
Prepare a 10-column Work Sheet from the above data.

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Q.3 (a) ADJUSTING, CLOSING AND REVERSING ENTRIES
Following are the selected Balance extracted from the Books of Sana & Nisa
Traders for the year ended on 30th September 1997.
1. Salaries Expense 12,800
2. Unearned Commission Revenue 15,700
3. Prepaid Insurance 10,500
4. Rent Income 18,000
5. Office Supplies Expense 4,200
Supplementary Data for Adjustments
1. Salaries Owing to the extent of Rs. 2,800.
2. Unearned Commission Revenue Rs. 4,300.
3. Insurance Premium was paid on 1st October, 1996 for Two Years.
4. Rent due but not received Rs. 6,000.
5. One third office supplies was unused.
Required:
Pass Adjusting, Closing necessary Reversing Journal Entries.

Q.3 (b) Following Errors were made by the Book Keeper of M/s. Munshi & Co.
for the month of November 1997.
1. Sale of Old furniture for Rs. 1,000 has been entered as sale of Merchandise.
2. Received a cheque from Arshad & Co. for Rs. 4,444/= but wrongly posted
to RASHID & CO.
3. Usman a Customer paid Rs. 4,500 but entered in his account as Rs. 5,400.
4. Earned and received Rs. 750 as Commission but recorded as Rs. 705.
5. The proprietor has taken away merchandise worth Rs. 500 for his personal
use but the entry was entirely omitted.
REQUIRED:
Pass Journal Entries to correct the above errors on 30th November 1997.

Q.4. BANK RECONCILIATION STATEMENT

A comparison of Cash and Bank records of M/S. Khalida & Afzal revealed the
following Information on 31st July 1997.
1. Balances as per Cash Book Rs. 13,579/=
2. Balances as per Bank Statement Rs. 1,019/=
3. Three Cheques amounting Rs. 1,300/=, Rs, 3,100/= and Rs. 4,400/= were
issued to the Suppliers. Only the first cheque of Rs. 1,300/= was presented
to the Bank till last day of the month.
4. Accompanying the Bank Statement was cheque of Nizam Bros for Rs.
5,000/= marked as NSF.
5. The Bank Statement showed a debit of Rs. 510 and Rs. 150 being Zakat
deduction and charges for collection, respectively.
6. Collection of Dividend by the Bank Rs. 600 and note receivable of Rs. 2,800
has no record in the Cash Book.
7. A cheque of Rs. 7,300 issued to Salman Paracha for purchase of Office
Furniture was entered by the Cashier as Rs. 3,700 in the Cash Book.

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8. Four Cheques totaling Rs. 12,400 were sent to the Bank for Collection but
only one cheque of Rs. 4,200 was collected and credited by the Bank.
9. The Bank Statement Showed payment of Rs. 1,200 as Insurance Premium
and a note payable of Rs. 3,000 but the cash book lacks this record.
10. A cash deposit of Rs. 6,000 into Bank has erroneously been recorded by
the firm's Cashier as Rs. 600.
11. Late Deposits of Rs. 7,200 on the last day did not appear in the Bank
Statement.
REQUIRED:
Prepare a Bank Reconciliation Statement on 31st July, 1997. Also pass necessary
Adjusting Journal Entries.

Q.5 (a) ACCOUNTS RECEIVABLES

On 1st January 1996 the Ledger of Sumera Ltd. Showed a Balance of Rs. 112,800
in Accounts Receivable and Credit Balance of Rs. 4,625 in Allowance for Bad
Debts Account.
1. Total Sales Rs. 250,000 (Including of Cash Sale of Rs. 117,500).
2. Sales Returns and Allowance Rs. 15,000.
3. Sales Discount Rs. 6,000.
4. Customer's Accounts Written off Rs. 4,000.
5. Cash Collected from Customers Rs. 175,000 (including Rs. 1,800 previously
written off).

REQUIRED:
1. Compute Allowance for Bad Debts if estimated at 3% of Net Credit Sales.
2. Record the above Transactions and also the Adjusting Entry of Bad Debts
Allowance in the Journal.
3. Prepare Partial Balance Sheet.

Q. 5 (b) The following selected balance have been taken from the books of
Aamna Stores for the year ended on 30th April 1997.
Accounts Receivable Rs. 76,000
Allowance for bad debts (Debit) Rs. 500.

REQUIRED:
1. Pass an Adjusting Entry if the Allowance for Bad Debts is maintained at 6%
of Accounts Receivable.
2. Prepare Partial Balance Sheet.

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Q.6. INVENTORY VALUATION

Below given data entries to Umer Nadeem & Bros for the month of May 1997.
The firm uses Periodic Inventory System
May 01 Inventory of 150 Units Costing Rs. 25,500.
May 10 Bought 100 Units at Rs. 173/= each.
May 18 Bought 125 Units at Rs. 178/= each.
May 24 Bought 75 Units at Rs. 180/= each.
May 28 Bought 200 Units at Rs. 176/= each.
During the month 450 Units were sold for Rs. 85,500.

REQUIRED:
1. Determine the Cost of Goods Sold under LIFO and FIFO Method.
2. Quantity and Value of Ending Inventory under Weighted Average Method.
3. Compute Gross Profit under each of the above Method.

Q.7. DEPRECIATION
On 1st April 1994, Tariq Tex. Co. bought Five Machines at a List Price of Rs.
40,000/= each with a Trade discount of 5%. The terms of Payment were 2/10,
n/30. The Company made the payment with in discount period. Additional
Expenses incurred and paid in cash were.
1. Freight and Octroi Rs. 10,400.
2. Paid Interest on the money borrowed from the bank for the purchase of
Machine Rs. 200.
3. Installation and Testing charges Rs. 23,200.
4. Insurance-in-transit Rs. 15,700.
5. Sales Tax 8% of Invoice Price.
6. Some parts damaged during installation and get repaired for Rs. 4,300.
It is estimated that these Machines will have a useful life of 15 years with a
salvage value of Rs. 10,700. The Company uses Sum of Years Digit Method of
providing depreciation.

REQUIRED:
1. Compute the Cost of Machinery.
2. Pass the Journal Entries to record the Purchase of Machinery & Exp.
3. Also Compute and Journalize the Adjusting Entries of Depreciation.
4. Expense for 1st three years if Accounting year of the Company ends on 31st
March.

Q. 7 (b) Pass a Compound Journal Entry if an old Delivery Van Originally bought
for Rs. 80,000 (5 year's ago) having an accumulated Depreciation of Rs. 54,000
was disposed for Cash Rs. 45,000 on 31st October 1997.

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Q.8 (a) ACCOUNTING FOR COMPANIES
Bilal Limited (Registered with a Capital of Rs. 5,000,000 divided into Rs. 10
share) made an issue of its shares during the year 1997 as under:
1. 15,000 shares to the Promoters for the services rendered.
2. 20,000 shares for purchase of Machinery (Market value of Share being Rs.
15/=)
3. Offered 365,000 shares to the Public at 20% premium. Applications (along
with Application money) received for 400,000 shares. The company allotted
the shares and refunded the excess money through Bank.

REQUIRED:
journalize the above transactions of Issue.
Q .8 (b) Iqbal Aziz Ltd. received Rs. 900,000 against the issue of 10,000 5%
debentures of Rs. 100 each, redeemable at par after 5 years.

REQUIRED:
Record the above issue into Company's Journal.

Q. 8 (c) The Expense and Income Summary of Sarfaraz Co. Ltd for the year
ended on 31st December, 1996 showed a Credit Balance of Rs. 18,80,000 which
is transferred to the Retained Earnings Account. The Directors decided:
1. To pay a Cash Dividend of 15% (on 100,000 Shares of Rs. 50/= each).
2. Rs. 100,000 to be transferred to General Reserve.
3. To Appropriate Rs. 250,000 and Rs. 170,000 for Plant Expansion and Building
Extension respectively.

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ACCOUNTING 1997 PRIVATE
Time: 3Hours Max. Marks: 100
Instructions: Attempt any FIVE questions.
Q.1. WORK SHEET
Following is the Pre-Closing Trial Balance of Hassan & Co. on Dec 31, 1998.
Debit Credit
Cash 1,000
Accounts Receivable 3,000
Inventory merchandise (01.01.96) 30,000
Office Supplies 2,500
Automobile 200,000
Accumulated Depreciation- Automobile 7,500
Accounts Payable 2,500
Hasan – Capital 200,000
Hasan- Drawings 1,600
Sales 190,400
Purchase 144,000
Freight in 500
Salaries Expense 5,800
Rent Expense 6,000
Automobile Expense 4,200
Utility Expense 1,800
400,400 400,400
Data for Adjustments on year end:
1. The inventory was counted at end, values Rs. 26,000
2. Out of Automobile Expenses, Rs. 400 represents those of owner’s private use.
3. Office Supplies has a physical balance at end valued Rs. 200.
4. Salaries included Rs. 1,500 not earned by employees.
5. The Automobile has run 10,000 Kilometers during the period. The rate
of depreciation is Re.1/Km.
REQUIRED:
Prepare a Ten Column worksheet.

Q.2. CLOSING AND OPENING JOURNAL ENTRIES

Take the data given in Questions No. 1 above.
REQUIRED:
1. Record the appropriate entries in general journal to close the accounts.
2. And the Opening entries in general journal for the next accounting year.

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Q.3 (a) ADJUSTING AND REVERSING ENTRIES

The following selected balances are taken from the pre-closing Trial Balance
of M/s. Zeeshan Traders for the year ended June 30, 1995.
Salaries Expense Rs.20,000
Commission Earned Rs.10,000
Sales Return & Allowance Rs.1,000
Advertising Unexpired Rs.5,000
Selling Expense Rs.8,000
General Expenses Rs.6,000
Allowance for Bad Debts (Cr.) Rs.400
Additional Data for Adjustment
1. Salaries accrued amount to Rs. 5,000.
2. Commissioning unearned amount to Rs. 900.
3. Sales Return & Allowance increases to Rs. 150.
4. AdvertisingexpiredamounttoRs.1,000
5. Allowance for Bad Debts to be raised to Rs. 1,000.
REQUIRED:
Prepare adjusting journal entries in proper form.

Q. 3 (b) Assume that an adjusting entry made on December 31, 1996 was as
follows.
Salaries Expense 4,000
Salaries Payable 2,000
(Four days Salaries for December, accrued)
On January 3, 1997 payment of Rs. 6,000 (6 days) salaries would be recorded
assuming that
1. No reversing entry used and
2. A reversing entry used, on January 01 1997.

Q.4(a) CASH CONTROL BANK RECONCILIATION

During the process of completing the bank reconciliation of Millat Supply Co.
for 28 February 1997, the following facts were discovered.
Balance as per Cash Book Rs.437,850
Balance as per Bank Statement Rs.460,750
1. A cheque for Rs. 2,050 was wrongly deducted in the cash book as Rs. 20,500.
2. Company deposited three cheques during the month, but one cheque of
Rs. 24,000 remains uncleared.
3. Cheque book charges by bank Rs. 50.
4. Bank charges or Rs. 1,500 was deducted by bank.
5. Cheque amounting Rs. 67,450 found outstanding.
6. A cheque amounting to Rs. 36,550 returned by bank marked.
7. A cheque for Rs. 36,500 was issued by entered in the company’s record as
Rs. 35,600.
REQUIRED:
Prepare a Bank Reconciliation Statement at Feb. 28, 1997 giving adjusted
balance of Cash Book and the Bank.

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4 (b) VOUCHER SYSTEM
Baloch Corporation, uses voucher system. The following transactions accrued
during the May 1997.
1. Voucher No. 100 prepared to purchase office equipment at cost of Rs. 4,000
from Hub Furniture Co.
2. Cheque No. 114 issued in payment of Voucher No. 100.
3. Voucher No. 101 prepared to establish a petty cash fund of Rs. 150.
4. Cheque No. 115 issued in payment of Voucher No. 101.
5. Voucher No. 102 prepared to replenish the petty cash fund which contained
Rs. 40 cash and receipts for postage Rs. 38 miscellaneous expense Rs. 54
and delivery service Rs. 18.
6. Cheque No. 116 issued in payment of voucher No. 102.
REQUIRED:
Record the above transactions in voucher Register and Cheque Register in the
general journal form.

Q.5 (a) ACCOUNTING FOR RECEIVABLES

An analysis of the accounts receivable at end year produced the following
groups.
Not yet due Rs. 150,000
01-30 days past due Rs. 75,000
31-60 days past due Rs 45,000
61-90 days past due Rs. 15,000
Over 90 days past due Rs. 10,000
Percentage considered uncollectable:
GROUP PERCENTAGE
1 2%
2 3%
3 15%
4 30%
5 50%
REQUIRED:
i) Compute the estimated amount of uncollectible account based on the above
estimates
ii) Give the adjusting entry to record the bad debts expense assuming that
allowance for doubtful account should a credit balance of Rs. 400.

Q.5 (b) The following balances available for Zubair Company as at 01.01.1996
Accounts Receivable Rs.300,000
Allowance for Doubtful Accounts Rs.16,000
During the year ended December 31st, 1996 the following transactions were
completed:
(a) Sales on account Rs. 950,000 and for cash Rs. 50,000
(b) Cash collection from customers Rs. 550,000
(c) Customers’ account written off amount to Rs. 10,000
(d) Previously written off accounts, recovered Rs. 8,000
The company estimates the uncollectible expense at rate of 2.5% of credit sales.

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REQUIRED:
i) Prepare entries in general journal to record the above transactions.
ii) Prepare adjusting entry for uncollectible expense at the end of period.

Q.6 (a) INVENTORY SYSTEM:

i. Purchase merchandise on account Rs. 120,000 and cash Rs. 3,000.
ii. Return merchandise worth Rs. 3,000.
iii. Paid freight on purchase Rs. 800.
iv. Paid to the merchandise creditor’s subject to credit term 2/10, n/30.
v. Sold merchandise, costing Rs. 55,000 for cash Rs. 10,000 and on account
Rs. 50,000.
REQUIRED:
Give the necessary journal entries under both Perpetual and periodic systems
Q. 6 (b) The records of Pioneer Sales Co., shows the following data for its sales
and purchase:
1996
Nov 1 Beginning Inventory 300 units at Rs. 55 Sold
Purchase Sold
Nov 04 375 units at Rs. 55
Nov 12 400 units at Rs. 56
Nov 24 200 units at Rs. 57
250 units at Rs. 60
300 units at Rs. 64
100 units at Rs. 65
REQUIRED:
Compute the ending inventory and the gross profit at the end of November,
1996 under FIFO and LIFO using periodic inventory system.

Q.7 (a) ACCOUNTING FOR PLANT ASSETS

Distinguish the following as CAPITAL or REVENUE expenditures.
1. Annual maintenance of Plant and Equipment.
2. Purchase of office furniture for business use.
3. Three years insurance paid on equipment for fire risk.
4. Purchase of hard disk for a computer to increase its storage capacity.
5. Purchase a new battery for a 3 years old truck.
6. Depreciation of Equipment Charged for the year.
Q. 7 (b)On January 01, 1993 Ghalib Co. purchased an equipment for Rs. 155,000.
The equipment has a estimated life of 5 years and expected salvage value of
Rs. 5,000. The accounting year of the Co. ends on December 31, each year.
REQUIRED;
Give the necessary COMPUTATIONS and the general entries to record the
disposal of the equipment on December 31, 1995 under each of the following
assumptions.
1.The equipment sold for case and gain realized valued Rs. 35,000 (assuming
that the Co. uses straight Line Method).
2.The equipment was traded-in at Rs. 30,000 for new equipment that had a
cash price of Rs. 175,000 (assuming that the Co. uses sum-of-the-years digits
method).
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Q.8. CORPORATIONS-ISSUANCE OF SHARES
Dewan Co. Ltd was incorporated on January 03, 1996 with an authorized capital
of Rs. 5,000,000 divided into 500,000 ordinary shares or Rs. 10 each. The
following information are available to you.
10-01-96 The formation expense of Rs. 50,000 was paid by the promoters.
15-01-96 The following shares were issued and fully subscribed at par:
30,000 shares to (NIT)
20,000 shares to the company employees.
50,000 to the general public.
16-06-96 The Company entered into an agreement with M/s. ZULFI
INDUSTRIES to takeover its assets and liabilities at the following
values.
Equipment Rs. 150,000, Building Rs. 220,000, Furniture and Fixture
Rs. 40,000, Accounts Payable Rs.10,000.
In exchange 30,000 ordinary shares of Rs. 10 each were issued and
fully subscribed.
31-12-96 The Company received cash Rs. 107,722 in exchange of 5 years.
12% Bonds liability worth Rs. 100,000.
31-12-96 Under writer’s commission of Rs. 14,500 is outstanding against
the company.
REQUIRED:
Prepare dated general entries from the above transactions in the book of Dewan
Co. Ltd.

Q.9. CORPORATE FINANCIAL STATEMENTS

Take the data given in Question No. 8 above.
REQUIRED:
Prepare a Balance Sheet of M/s. DEWAN COMPANY LTD, as on December 31,
1996.

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