INDIAN INSTITUTE OF MANAGEMENT INDORE

Page 1 of 6

MODEL ANSWER PAPER OF MAC-1-MID-TERM EXAM MILTON PETROLEUM COMPANY (TOTAL: 240 MARKS) (A) BALANCE SHEET AS ON 1st JULY, 2005 (13 MARKS)
ASSETS Gross Block Cash Accounts Receivable Inventory Prepaid Rent TOTAL AMOUNT $ 6,000 5,000 1,000 4,000 1,200 17,200 LIABILITIES Share Capital Retained Earnings Salaries Payable Dividend Payable Accumulated Depreciation Accounts Payable TOTAL AMOUNT $ 7,500 3,500 500 200 2,500 3,000 17,200

(B) JOURNAL ENTRIES (62 MARKS)

S. No 1(a) 1(b) 1(c) 1(d) 1(e) 1(f) 1(g) Particulars Purchases a/c Dr. Accounts Payable a/c Cr. Repairs a/c Dr. Accounts Payable a/c Cr. Office Supplies & Postal a/c Dr. Accounts Payable a/c Cr. Gasoline & Oil a/c Dr. Accounts Payable a/c Cr. Gross Block a/c Dr. Accounts Payable a/c Cr. Telephone, Electricity and Other Expenses a/c Dr. Accounts Payable a/c Cr. Maintenance a/c Dr. Accounts Payable a/c Cr. Accounts Receivable a/c Dr Sales a/c Cr. Accounts Receivable a/c Dr. Maintenance Services a/c Cr. Salaries a/c Dr. Salaries Payable a/c Cr. Salaries a/c Dr. Salaries Payable a/c Cr. Salaries a/c Dr. Salaries Payable a/c Cr. Dividends a/c Dr. Dividends Payable a/c Cr. Accounts Payable a/c Dr. Cash a/c Cr.
Mark

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

Debit $ 40,000 500

Credit $ 40,000 500

250 250 1,500 1,500 1,000 1,000 300 300 400 400 50,000 50,000 5,000 5,000 3,000 3,000 2,200 2,200 4,800 4,800 2,000 2,000 41,500 41,500

4(a) 4(b) 4(c)

6(a)

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA

INDIAN INSTITUTE OF MANAGEMENT INDORE

Page 2 of 6

6(b) 6(c) 6(d) 6(e) 6(f)

Salaries Payable a/c Dr. Cash a/c Cr. Rent a/c Dr. Cash a/c Cr. Prepaid Rent a/c Dr. Rent a/c Cr. Rent a/c Dr. Prepaid Rent Cr. Dividends Payable a/c Dr. Cash a/c Cr. Cash a/c Dr Profit on Sale of Truck a/c Cr. Accumulated Depreciation a/c Dr. Gross Block a/c Cr. Cash a/c Dr. Accounts Receivable a/c Cr. Cash a/c Dr. Share Capital a/c Cr. Sales Promotion Campaign Expenses Dr. Cash Cr. Deferred Sales Promotion Campaign Expenses Dr. Sales Promotion Campaign Expenses Cr. Depreciation a/c Dr. Accumulated Depreciation a/c Cr. Provision for Bad Debts a/c Dr. Accounts Receivable a/c Cr. Purchases a/c Dr. Inventory a/c Cr. Inventory a/c Dr. Purchases a/c Cr. Cost of Fuel Oil Consumed Dr. Purchases Cr. Income-Tax a/c Dr. Income-Tax Payable a/c Cr.

1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

10,300 10,300 2,700 2,700 1,350 1,350 1,200 1,200 2,200 2,200 150 150 800 800 54,000 54,000 1,800 1,800 1,000 1,000 750 750 1,200 1,200 100 100 4,000 4,000 9,000 9,000 35,000 35,000 450 450

7(a) 7(b)

10(a) 10(b)

11

12

13(a) 13(b) 13(c)

14

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA

INDIAN INSTITUTE OF MANAGEMENT INDORE

Page 3 of 6

(C) T ACCOUNTS (101 MARKS)

Cash Account (10 Marks) $ Balance b/d 5,000 Accounts Payable a/c Accounts Receivable a/c 54,000 Salaries Payable a/c Profit on Sale of Truck a/c 150 Rent a/c Share Capital a/c 1,800 Dividends Payable a/c Sales Promotion Campaign Expenses a/c Balance c/d 60,950 Accounts Receivable Account (6 Marks) Balance b/d 1,000 Cash a/c Sales a/c 50,000 Provision for Bad Debts a/c Maintenance Services a/c 5,000 Balance c/d 56,000 Accounts Payable Account (10 Marks) Cash a/c 41,500 Balance b/d Balance c/d 5,450 Purchases a/c Gross Blocks a/c Telephone, Electricity and Other Expenses a/c Gasoline & Oil a/c Maintenance a/c Office Supplies and Postage a/c Repairs a/c 46,950 Gross Block Account (4 Marks) Balance b/d 6,000 Accumulated Depreciation a/c Acc. Payable a/c 1,000 Balance c/d 7,000 Prepaid Rent Account (4 Marks) Balance b/d 1,200 Rent a/c Rent a/c 1,350 Balance c/d 2,550 Accumulated Depreciation Account (4 Marks) Equipment a/c 800 Balance b/d Balance c/d 2,900 Depreciation a/c 3,700 Purchases Account (4 Marks) Inventory 4,000 Cost of Fuel Consumed a/c Accounts Payable a/c 40,000 Inventory 44,000 Dividends Payable Account (3 Marks) Cash a/c 2,200 Balance b/d Dividends a/c 2,200 Share Capital Account (3 Marks) Balance c/d 9,300 Balance b/d Cash a/c 9,300 $ 41,500 10,300 2,700 2,200 1,000 3,250 60,950 54,000 100 1,900 56000 3,000 40,000 1,000 300 1,500 400 250 500 46,950 800 6,200 7,000 1,200 1,350 2,550 2,500 1,200 3,700 35,000 9,000 44,000 200 2,000 2,200 7,500 1,800 9,300

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA

INDIAN INSTITUTE OF MANAGEMENT INDORE

Page 4 of 6

Retained Earnings Account (2 Marks) 3,500 Balance b/d 3,500 Depreciation Account (2 Marks) Accumulated Depreciation a/c 1,200 Balance c/d 1,200 Rent Account (4 Marks) Prepaid Rent a/c 1,200 Prepaid Rent a/c Cash a/c 2,700 Balance c/d 3900 Dividends Account (2 Marks) Dividends Payable a/c 2,000 Balance c/d 2,000 Profit on Sale of Truck Account (2 Marks) Balance c/d 150 Cash a/c 150 Maintenance Services Account (2 Marks) Balance c/d 5,000 Account Receivable a/c 5,000 Salaries Payable Account (6 Marks) Cash a/c 10,300 Balance b/d Balance c/d 200 Salaries a/c Salaries a/c Salaries a/c 10,500 Sales Account (2 Marks) Balance c/d 50,000 Account Receivable a/c 50,000 Salaries Account (4 Marks) Salaries Payable a/c 3,000 Balance c/d Salaries Payable a/c 2,200 Salaries Payable a/c 4,800 10,000 Repairs Account (2 Marks) Accounts Payable a/c 500 Balance c/d 500 Office Supplies & Postage Account (2 Marks) Accounts Payable a/c 250 Balance c/d 250 Maintenance Account (2 Marks) Accounts Payable a/c 400 Balance c/d 400 Gasoline & Oil Account (2 Marks) Accounts Payable a/c 1,500 Balance c/d 1,500 Telephone & Electric and Other Expenses Account (2 Marks) Accounts Payable a/c 300 Balance c/d 300 Income -Tax Account (2 Marks) Income -Tax Payable a/c 450 Balance c/d 450 Balance c/d

3,500 3,500 1,200 1,200 1,350 2,550 3,900 2,000 2,000 150 150 5,000 5,000 500 3,000 2,200 4,800 10,500 50,000 50,000 10,000

10,000 500 500 250 250 400 400 1,500 1,500 300 300 450 450

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA

INDIAN INSTITUTE OF MANAGEMENT INDORE

Page 5 of 6

Income -Tax Payable Account (2 Marks) 450 Income -Tax a/c 450 Provision for Bad Debts Account (2 Marks) Accounts Receivable a/c 100 Balance c/d 100 Sales Promotion Campaign Expenses Account (3Marks) Cash a/c 1,000 Deferred Sales Promotion Campaign Expenses a/c Balance c/d 1,000 Deferred Sales Promotion Campaign Expenses Account (2 Marks) Sales Promotion Campaign 750 Balance c/d Expenses a/c 750 Inventory Account (4 Marks) Balance b/d 4,000 Purchases a/c Purchases a/c 9,000 Balance c/d 13,000 Cost of Fuel Oil Consumed Account (2 Marks) Purchases a/c 35,000 Balance c/d 35,000 Balance c/d S. No 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Name of Accounts Cash a/c Accounts Receivable a/c Accounts Payable a/c Gross Block a/c Prepaid Rent a/c Accumulated Depreciation a/c Inventory a/c Share Capital a/c Retained Earnings a/c Depreciation a/c Rent a/c Dividends a/c Profit on Sale of Truck a/c Maintenance Services a/c Salaries Payable a/c Sales a/c Salaries a/c Repairs a/c Office Supplies and Postage a/c Maintenance a/c Gasoline & Oil a/c Telephone, Electric and Other Expenses a/c Cost of Fuel Oil Consumed a/c Sales Promotion Campaign Expenses a/c Deferred Sales Promotion Campaign Expenses a/c Provision for Bad Debts a/c Income-Tax a/c Income-Tax Payable a/c Debit $ 3,250 1,900 6,200 1,350

450 450 100 100 750 250 1,000 750 750 4,000 9,000 13,000 35,000 35,000 Credit $

(D) TRIAL BALANCE AS ON 30th JUNE 2005 (30 MARKS)

5,450

2,900 9,000 9,300 3,500 1,200 2,550 2,000 150 5,000 200 50,000 10,000 500 250 400 1,500 300 35,000 250 750 100 450 76,950 450 76,950

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA

INDIAN INSTITUTE OF MANAGEMENT INDORE

Page 6 of 6

(E) INCOME STATEMENT FOR THE YEAR ENDED 30th JUNE, 2005 (19MARKS)
1 2 3 Income: Sales Profit from Sale of Old Truck Maintenance Services Less Expenditure: Cost of Fuel Oil Consumed Rent Salaries Office Supplies and Postage Repairs Gasoline & Oil Consumed Maintenance Depreciation Telephone, Electricity and Other Expenses Sales Promotion Campaign Expenses Provision for Bad Debts Less: Income-Tax Less: Dividends Net Profit for the Year $ 50,000 150 5,000 55,150 35,000 2,550 10,000 250 500 1,500 400 1,200 300 250 100

4 5 6 7 8 9 10 11 12 13 14 15 16 17

52,050 3,100 450 2,650 2,000 650

(F) BALANCE SHEET AS ON 30th JUNE, 2005 (15 MARKS)

Assets Gross Block Cash Prepaid Rent Inventory Accounts Receivable Deferred Sales Promotion Campaign Expenses Amount $ 6,200 3,250 1,350 9,000 1,900 750 22,450 Liabilities Share Capital Retained Earnings (3500+650) (2 Marks) Accounts Payable Salaries Payable Income-Tax Payable Accumulated Depreciation Amount $ 9,300 4,150 5,450 200 450 2,900 22,450

THANKS!

ALL THE BEST!!

MODEL ANSWER PAPER OF MAC -I -MID-TERM EXAMINATION BY PROF. V. K. GUPTA