Q1. An accountant finds that the trial balance of his client did not tally and it showed an excess credit of Rs. 69.74. He transferred it to a suspense account and later discovered the following errors. a) Rs. 44.37 paid to Anand has been credited to his account as Rs. 34.37. b) A purchase of Rs. 145.50 has been posted as Rs. 154.50 to the purchases account. c) An expenditure of Rs. 158 on repairs has been debited to the buildings account. d) Rs. 80 was allowed by B as discount which has not been entered in the books. e) A sum of Rs. 125.05 realised on the sale of old furniture has been posted to the sales account. Give journal entries to rectify the errors and show the suspense account as it would appear after adjustments Hint: Total of suspense a/c = 78.74 Q2. Distinguish between management accounting and financial accounting.
Q3. Draw the Balance Sheet for the following information provided by Sarawath Ltd.. a. b. c. d. e. f. g. h. i. Current Ratio Liquidity Ratio Net Working Capital Stock Turnover Ratio Ratio of Gross Profit to Sales Fixed Asset Turnover Ratio Average Debt collection period Fixed Assets to Net Worth Reserve and Surplus to Capital : : : : : : : : : 2.50 1.50 Rs.300000 6 times 20% 2 times 2 months 0.80 0.50
Hint: B/S total 1100000
Q4. Following is the balance sheet for the period ending 31st March 2006 and 2007. If the current year’s net loss is Rs.38,000, calculate the cash flow from operating activities. 31 MARCH 2006 Short-term loan to employees Creditors Provision for doubtful debts Bills payable Stock in trade Bills receivable Prepaid expenses Outstanding expenses 15,000 30,000 1,200 18,000 15,000 10,000 800 300 2007 18,000 8,000 20,000 13,000 22,000 600 500 st