CIE Accounting Paper-2: Specimen Questions with Answers 14 - 16 of 103

Passage

ABC & Co. started business on 1st January 2014 with a capital of £240000.

During the month, the following transactions took place:

2nd Bought goods from XYZ on credit £60000

5th Sold goods to MNO £75000

5th Cash Purchases £75000

8th Cash Sales £45000

9th Goods returned to XYZ £ 6000

15th Bought Furniture £45000

16th Cash paid to XYZ £36000

16th Loan taken from Mr. K £90000

17th Goods Returned by MNO £9000

20th ABC takes stock for personal use £9000

21st Cash received from MNO £36000

25th Salary paid £15000

28th Purchase of Stationery £ 3000

29th Amount paid to Mr. K on loan Account £ 54000

30th Interest received £12000

Question number: 14 (4 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

Prepare the trial balance of ABC & Co for the month ended 31.01. 2014

Explanation

Trial balance of ABC & Co as on 31.01. 2014

shows Trial balance of ABC & Co as on 31.01. 2014

PARTICULARS

LF

DEBIT AMOUNT

£

CREDIT AMOUNT

£

Cash A/C

195000

Capital A/C

240000

Stock A/C

9000

XYZ A/C

18000

MNO A/C

30000

Furniture A/C

45000

Loan from Mr. K A/C

36000

interest A/C

12000

Salaries A/C

15000

Drawings A/C

9000

Stationery A/c

3000

Total

306000

306000

Question number: 15 (5 of 5 Based on Passage) Show Passage

Essay Question▾

Describe in Detail

The following items will find their place on which side of the trial balance.

(i) Opening Stock: ————————

(ii) Closing Stock: ————————

(iii) Loan taken: ————————-

(iv) Goodwill: ————————

(v) Returns outwards: ————————-

Explanation

(i) Debit balance

(ii) Will not find place in trial balance

(iii) Credit balance

(iv) Debit balance

(v) Credit balance

Passage

Mr. Jack purchases machinery at a cost of £100000. The life of the machinery is said to be 3 years At the end of 3 years the machinery is sold as scrap at £20000.

Question number: 16 (1 of 5 Based on Passage) Show Passage

Short Answer Question▾

Write in Short

Calculate the profit or loss of Mr. Jack if he depreciates the machinery on Written down value method

Explanation

Profit of £489

Deprecation in the books of Mr. Jack on the basis of written down value method

shows Deprecation in the books of Mr. Jack on the basis of written down value method

PARTICULARS

AMOUNT

Cost of asset in year 1

100000

Less Depreciation@42%

42000

Book value at the end of year 1

58000

Book value at the beginning of year 2

58000

Less Depreciation@42%

24360

Book value at the end of year 2

33640

Book value at the beginning of year 3

33640

Less Depreciation@42%

14129

Book value at the end of year 3

19511

Scrap value

20000

Profit = Scrap Value - Book Value

489