AFM M-1 FINAL TEST

1) Make adjustment entries in the books of Nikunj patel & give

effects in financial statement from the following information 18
a) Cost of closing stock is Rs 40000 but market value is Rs 50000.
b) Rent Rs 1000 is still unpaid.
c) Insurance premium paid in advance Rs. 500
d) Interest due but not receive Rs.1000
e) Out of apprentice premium of Rs 100 received, Rs 50 belongs to
next year.
f) Furniture is to be depreciated at 15%, it is valued at 80000.
g) Allow interest on capital of Rs. 40000 at 5% P.A.
h) Charge interest for 2 months on drawings for Rs 10000 at 10%
P.A.
i) Rs 5000 is due from sunil, but it is to be written off as bad debt as
he is declared insolvent
2) The following trial balance of Anuja Parikh as on 31st mar, 2009
 Required to make closing entry of trial balance 12
 Prepare financial statement 20
Particular Debit Particular Credit
Rs Rs
Cash 540 Interest on bank 200
deposit
Bank 10630 Sales 98580
Deposit in bank 2000 Goods return 500
Purchase 40675 Bills payable 900
Goods return 680 10% mortgage loan 10000
Wages & freight etc. 10480 Commission received 100
Coal & power 4730 Discount receive 400
Bills receivable 1000 Capital 81000
Packing exp. 3200 Creditors 5800
Carriage inward 2040
Interest on mortgage loan 400
st
Stock of goods (1 apr, 5760
2008)
Building 30000
Land 9000
Machines 20000
Tools 7500
Salary (up to 28-2-09 14300
paid)
Printing & stationary 900
Postage and telegram 400
Purchase exp. 800
Trade exp. 200
Office exp. 900
Insurance 600
Drawings 15245
Debtors 15500
Total 197480 197480

Adjustments:
1. The cost of closing stock is Rs. 6800 but its market price is Rs
7000
2. Depreciate machinery @ 10%, furniture @ 10%, tools @ 20%.
3. Write off Rs 500 as bad debt from debtors.
4. Commission due but not received Rs. 194
5. Insurance premium of Rs. 170 is paid on a policy up to 30-09-09.
6. Rs. 2000 spent on construction of bicycle shed for employees is
included in wages.
7. Maintain bad debts reserve at 5% on debtors and create reserve for
discount on debtors and creditors at 2%.
8. Goods worth Rs 200 are distributed free as samples an goods of Rs
100 are given away as charity
9. On 1-10-08 she brought his personal furniture worth Rs 5000 in
the business which is not recorded in the books of account.