CSS Accountancy & Auditing Company Accounts

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CSS Accounting & Auditing
Topic Vise Past Papers (Unsolved)

Company Accounts
Q. 1 (CSS – 2006, Paper # 1, Q. # 3) (20 Marks)
The following is the trail balance of Metropolitan Company (Private) Limited as on June 30, 2005:

Particulars Debit Credit

Plant & Machinery .................................... 375,000
Wages ......................................................... 90,000
Vehicles ....................................................... 71,000
Furniture and Fixtures ................................. 30,000
Carriage inward ............................................. 5,000
Carriage outward ........................................... 6,250
Freehold Land.............................................. 75,000
Purchasing expenses .................................... 28,750
Insurance ...................................................... 6,250
Rates and taxes ............................................ 25,000
Office supplies ............................................... 5,750
Electricity .................................................... 48,500
Salaries ....................................................... 40,000
Opening stock .............................................. 56,750
Purchases ................................................... 325,000
Sales return .................................................... 8,250
Discount ........................................................ 3,000
Bad debts ....................................................... 4,375
Mark-up & bank charges ............................... 5,625
Cash in hand ................................................. 7,125
Short term deposit ...................................... 50,000
Repairs & maintenance ............................... 14,500
Postage, telegram & telephone ...................... 5,000
Sundry debtors ........................................... 116,100
Capital 500,000
Investments 37,500
Sales 817,500
Purchases return 10,750
Sundry Creditors 61,600
Bank overdraft 29,375
Reserve for doubtful debt 7,500
Discount & Commission 4,250
Interest received 3,125
Dividend income 5,625
1,439,725 1,439,725
 There is a difference in Trial Balance total (Rs. 22,500) which is added in the Value of Sales so the sales is shown as rs. 817,500
instead of Rs. 795,000.
The following adjustments are required to be made into the accounts:
(1) Closing stock Rs.73,000.
(2) Depreciation to be provided at the following rates:
(a) Freehold land ............................................... 5%
(b) Vehicles20%

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CSS Accountancy & Auditing Company Accounts
(c) Other assets 10% (Plant & Machinery and furniture & fixtures)
(3) Reserve for doubtful debt is required to be kept at 5% of the debtors balance.
(4) Prepaid insurance Rs.1,500 and rates & taxes – Rs.375.
(5) Outstanding wages Rs.3,000 and salary Rs.8,375
Required: Prepare trading, profit and loss account and balance sheet as at 30-06-2005.

Q. 2 (CSS – 2007, Paper # 1, Q. # 3) (25 Marks)

The following Trial Balance was extracted from the books of Orix Industries Limited as on 31 st December, 2006.

Rs. Rs.
Share Capital 280,000
Office Salaries 19,860
Machinery and Plant 128,400
Opening Stock 72,940
Purchases 292,620
Purchases Returns 4,290
Sales 572,140
Sales Returns 3,210
Loan on Mortgage 85,000
Manufacturing Wages 123,140
Traveller’s Salaries and Commission 32,760
Factory Fuel and Lighting 4,280
Office Expenses 3,220
Interest on Loan 4,250
Carriage Inward 4,310
Carriage Outward 3,420
Discount 780
Provision for Bad Debts 2,500
Freehold Premises 142,000
Office Rent and Rates 2,710
Factory Rates and Insurance 2,220
Office Furniture 5,000
Machinery Repairs 3,980
Royalties paid 4,710
Bad Debts 2,190
Sundry Debtors 62,840
Sundry Creditors 17,210
Cash in Hand 3,270
Cash at Bank 22,730
Bill Receivable 17,860
961,920 961,920
Additional Information:
(a) Closing Stock Rs. 87,210.
(b) Depreciation to be provided on Machinery and Plant at 10% and Office Furniture at 5%.
(c) The provision for Bad Debts is to be increased by Rs. 4,000.
(d) Outstanding Wages Rs. 3,210 and Salaries Rs. 920.
(e) Insurance Premium Rs. 2,400 is included in Machinery Repairs by mistake.
Required: Prepare Trading and Profit and Loss Account for the year ended 31st December, 2006 and a Balance Sheet as
on that date.

Q. 3 (CSS – 2008, Paper # 1, Q. # 3) (25 Marks)

The following balances appeared in the books of X. Ltd as on 31 st December, 2006:
Debit Balances Rs. Credit Balances Rs.
Building 50,000 Issued subscribed and paid up capital 3,00,000
Purchases 2,50,451 General reserve 1,25,000
Manufacturing expenses 1,79,500 Unclaimed Dividends 3,663
Establishment expenses 13,407 Trade Creditors 18,029
General Charges 15,539 Sales 4,91,974
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CSS Accountancy & Auditing Company Accounts
Machinery 1,00,000 Depreciation Reserve 35,500
Motor Vehicles 7,500 Interest on Investments 4,272
Furniture 2,500 Profit & Loss A/C (1st January 2006) 8,423
Opening stock 86,029 Staff Provident Fund 18, 750
Book Debts 1,11,690
Investments 1,44,475
Cash 36,120
Directors’ Fees 900
Interim Dividend 7,500
10,05,611 10,05,611

From these balances and the following information, prepare the company’s Balance Sheet as on 31st December, 2006 and
its Profit and Loss Account for the year on that date:
(a) The stock on 31st December, 2006 was valued at Rs. 74, 340.
(b) Provide Rs. 5,000 for depreciation on fixed assets, Rs. 3,250 for Managing Director’s commission and Rs. 750 for the
company’s contribution to their Staff Provident Fund.
(c) Interest accrued on investments amounted to Rs. 1,375.
(d) A provision of Rs. 4,000 for taxes in respect of profits 2006 is considered necessary.
(e) The directors propose a final dividend @5%

Q. 4 (CSS – 2009, Paper # 1, Q. # 6) (25 Marks)

The following is the Trial Balance at 30th June 2008 of the L.Y. Manufacturing Company, Limited: - (Rupees in thousands)
Rs. Rs.
Inventory, 1st July 2007 7,500
Sales 35,000
Purchases 24,500
Productive Wages 5,000
Discounts 700 500
Salaries 750
Rent 495
General Expenses 1,705
Profit and Loss Account, 1st July, 2007 1,503
Interim Dividend paid, February 2008 900
Share Capital – 1,000 shares of Rs.10 each fully paid 10,000
Accounts Receivable and Accounts Payable 3,750 1,750
Plant and Machinery 2,900
Cash in hand and at Bank 1,620
Reserve 1,550
Loan to Managing Director 325
Bad Debts 158
50,303 50,303
Adjustments:
1. Depreciate Machinery at 10% per annum.
2. Reserve 4% discount on Accounts Receivable.
3. Allow 2% discount on Accounts Payable.
4. One Month’s Rent at Rs. 45 per month was due on 30th June, 2008.
5. Reserve 5% for bad and doubtful debts.
6. Inventory on 30th June 2008 was Rs. 8,200.
Required: Trading and Profit and Loss Account for the year ended 30th June 2008, and the Balance Sheet as on
that date.

Q. 5 (CSS – 2010, Paper # 1, Q.# 6) (25 Marks)

The following figures are taken from the books of Sheen Company Limited as on December 31, 2009

Rs. Rs.
Opening stock 75000 Purchases returns 10000
Purchases 245000 Sales 340000
Wages 30000 Discount 3000
Carriage 950 Profit and loss 15000

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CSS Accountancy & Auditing Company Accounts
Furniture 17000 Share capital 100000
Salaries 7500 Creditors 17500
Rent 4000 General reserve 15500
Trade expenses 7050 Bills payable 7000
Dividend paid 9000
Debtors 27500
Plant and machinery 29000
Cash at bank 46200
Patents 4800
Bill Receivables 5000
508000 508000
Adjustment: Closing stock was valued at retail price Rs.105600 which was 20% higher than cost price. Provide for income
tax Rs.19827. Depreciate plant and machinery at 15%, furniture at 16% and patents at 5%. There was outstanding rent Rs.
800 and salaries Rs. 900. Make provision for bad debts Rs. 510. Provide for manager remuneration at 10% of net profit
before tax. The directors proposed dividend at 10% on paid up capital.
Required: Prepare trading and profit and loss account for the year ended December 31, 2009 and a balance sheet as
at that date.

Q. 6 (CSS – 2014, Paper # 1, Section – A, Q.# 2) (20 Marks)

At the beginning of 2000, Mr. Saadiq decided to open an advertising agency called The Best Agency. During 2000 the
following transactions occurred.
the beginning of 2000, Mr. Saadiq decided to open an advertising agency called The Best Agency. During 2000 the following transa
Debit balances Rs. Credit balances Rs.
Opening stock 50000 Purchases returns 1000
Purchases 160000 Sales 300000
Carriage 4000 Discount 1500
Furniture 15000 Profit and loss 35000
Salaries 45000 Share capital 500000
Rent 34800 Sundry creditors 20000
Dividend paid 4500 General reserve 30000
Sundry debtors 60000 Salaries payable 2500
Machinery 300000 Provision for bad debts 9500
Premises 200000 Bad debts recovered 500
Cash at bank 9700 Bank loan 10% taken 1.1.2013 50000
Directors fee 9000
Bills receivable 21000
Trade expenses 9000
Prepaid insurance 1500
Bad debts 2000
Interest on bank loan 4500
Investments market price (Rs. 19000) 20000
950000 950000

ADJUSTMENTS
(1)The average stock at the year–end was worth Rs. 65,000. (2) Create a provision for income tax Rs. 10,000. (3) Increase
provision for bad debts by Rs. 12000. (4) Depreciate machinery at 10%; furniture at 15%; and Premises at 5%. (5) There
is pending lawsuit for Rs. 50,000 against the company for infringement of trademarks. (6) The machinery account
includes new machinery worth Rs. 25,000 purchased on January 1, 2012. This machinery is till lying unpacked at the end
of December 31, 2013.
Prepare trading and profit and loss account; profit and loss appropriation account for the year ended December
31, 2013 and balance sheet as at that date as per Companies Ordinance, 1984.

Q. 7 (CSS – 2016, Paper # 1, Section – A, Q. # 2) (20 Marks)

Global Service Company was organized on April 1, 2015. The company prepares quarterly financial
statements. The adjusted trial balance at June 30, 2015 is given below.

Debits Credits
Cash 5,190 Accumulated depreciation 700

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CSS Accountancy & Auditing Company Accounts
Accounts receivable 480 Notes payable 4,000
Prepaid rent 720 Accounts payable 790
Supplies 920 Salaries and wages payable 300
Equipment 12,000 Interest payable 10
Dividends 500 Unearned rent revenue 400
Salaries and wages expense 7,400 Share capital-ordinary 11,200
Rent expense 1,200 Service revenue 11,360
Depreciation expense 700 Rent revenue 900
Supplies expense 160
Utilities expense 350
Interest expense 40
Total Debits 29,660 29,660
(a). Prepare an income statement for the Quarter April 1 to June 30. (10)
(b). Prepare statement of Retained Earnings. (5)
(c). Prepare a Balance Sheet with proper headings. (5)

Q. 8 (CSS – 2017, Paper # 1, Section – A, Q. # 3 (a) (10 Marks)

A corporation had stockholders' equity on January 1 as follows:
Common Stock, $10 par value, 1,500,000 shares authorized, 600,000 shares issued;
Paid-in Capital in Excess of Par Value, Common Stock, $1,000,000 Retained Earnings, $2,500,000.
Required: Prepare journal entries to record the following transactions:
 Feb. 15 The board of directors declared a 10% stock dividend to stock holders of record on March 1, to be issued
on April 15. The stock was trading at $8 per share prior to the dividend.
 March 30 Sold 100,000 shares of common stock for $11 per share.
 March 31 Issued the stock dividend.

Q. 9 (CSS – 2019, Paper # 1, Part – II, Section – I, Q. # 2 (20 Marks)

Some amounts are omitted in each of the following financial statements.

XY. Co.
Total assets Rs. 37,500
Total liabilities ?
Common stock 2,500
Retained earnings 13,500
Revenue 24,000
Expenses ?
Retained earnings, Jan. 1 ?
Net income 7,500
Dividends 6,000
Retained earnings, Dec. 31 13,500

Q. 10 (CSS – 2020, Paper # 1, Part – II, Section – I, Q. # 2 (20 Marks)

On September 1,2011, the account balances of R and Equipment Repair, Inc. were as follows.
No. Debits No. Credits
101 Cash Rs. 4,880 154 Accumulated Depreciation Rs. 1,500
112 Accounts Receivable 3,520 201 Accounts Payable 3,400
126 Supplies 2,000 209 Unearned Service Revenue 1,400
153 Store Equipment 15,000 212 Salaries Payable 500
311 Common Stock 15,000
320 Retained Earnings 3,600
Rs.25,400 Rs.25,400
During September the following summary transactions were completed.
Sept. 8 PaidRs.1,400 for salaries due employees, of which Rs.900 is for September.

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CSS Accountancy & Auditing Company Accounts
10 Received Rs.1,200 cash from customers on account.
12 Received Rs.3,400 cash for services performed in September.
15 Purchased store equipment on account Rs.3,000.
17 Purchased supplies on account Rs.1,200.
20 Paid creditors Rs.4,500 on account.
22 Paid September rent Rs.500.
25 Paid salaries Rs.1,250.
27 Performed services on account and billed customers for services provided Rs.1,500.
29 Received Rs.650 from customers for future service.
Adjustment data consist of:
Supplies on hand Rs.1,200. Accrued salaries payable Rs.400. Depreciation is Rs.100 per month.
Unearned service revenue of Rs.1,450 is earned.
Required
(a) Journalize the September transactions. Prepare a trial balance at September 30.
(b) Journalize and post adjusting entries. Prepare an adjusted trial balance.
(c) Prepare an income statement and a retained earnings statement for September and a balance sheet
at September 30.

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