<p>Final old test papers series 1
PAPER – 1 : ADVANCED ACCOUNTING
1. The following balances are extracted from the books of Surya Ltd., a real estate
company, on 31st March, 2006:
Purchases of materials
Share capital fully paid
Land purchased in the year as stock
Work in progress on 01.04.2005
Equipment, Fixtures and Fittings at cost
Stock on 01.04.2005
Profit and Loss Account, Credit Balance
Interest on Loan and Overdraft
Depreciation on Equipment on 01.04.2005
You also obtain the following information:
(a) On 31st March, 2006, stock on hand including the land acquired during the
year, is valued at Rs. 1,42,000. Work in progress at that date is valued at Rs.
(b) On 1st October, 2005 the company moved to new premises. The premises
are on a 12 years lease and the lease premium paid amounted to Rs. 42,000.
The company used sub-contract labour of Rs. 40,000 and materials at cost of
Rs. 38,000 in the refurbishment of the premises. These are to be considered
as part of the cost of leasehold premises.
(c) A review of the debtors reveals specific doubtful debts of Rs. 35,000 and the
directors wish to provide for these together with a general provision based on
2% of the balance.
(d) Depreciation on equipment, fixtures and fittings is provided at 15% on the
written down value.
(e) Surya Ltd. sued Bright Ltd. for supplying defective materials which has been
written off as valueless. The Directors are confident that Bright Ltd. will
(f) The directors propose a dividend of 25%.
(g) Rs. 20,000 is to be provided as audit fee.
(h) The company will provide 10% of the pre-tax profit as bonus to employees in
the accounts before charging the bonus.
Income tax t