Nothern Province Education Deparment

Model Paper
General Certificate of Education (Adv.level) Examination 2019

Accounting I 33 E I Two Hours

Instroductions :- Index : .....................................

 Select the correct answer for question No. 1 - 30 and write its Only fpr use of examiner
number in the dotted lines given Question paper - I
 Write short answers for the questions No. 31 – 50 on the Question No. Marks
dotted line.
01 - 30
 Each question carries 2 Marks.
31 - 50

Total

01) Which of the following is a financial accounting input?

1) Historical informations 2) Forecasting informations.
3) Transactions and events 4) Financial statements
5) Marginal cost information (………)

02) Which of the following is considered as a management accounting information?

1) Is there posible to increase employees salary?
2) Is there better position to perform guaranteed liability?
3) Is there adequate returns for the investment?
4) What are the decisions and plannings for the future developments?
5) Are the financial statements given to needed organizations? (………)

03) Sumati business sold goods costings Rs 80, 000 for a credit of Rs 100 000. Of these Rs 16, 000 cost
of items were returned by customers. The impact of these transactions.
1) equity and asset will increase by Rs 20, 000.
2) equity and asset will increase by Rs. 8000.
3) equity to be reduced by Rs. 20, 000, The asset increse by Rs 8000, The Liability to be increase
Rs 100, 000.
4) Asset and liability reduced by Rs 100, 000.
5) The equity and Asset are increased by Rs 16,000. (………)

04) In the financial position statement of a business, the stationary equipment used to be current assets
and office equipment as non – current asset. Related Basic concept of,
1) Accured concept. 2) Going concern concept 3) Cost concept
4) Prudence concept 5) Business entity concept. (…..…..)

05) Difference between the financial year income and expenses indicates.
1) financial Position 2) financial Position Changes 3) changes in cash
4) financial performance 5) equity changes (…..…..)

Grade - 13 (2019) 1 Accounting – I

  Answer the questions no. 6 and 7 using followings informations.
All cash receives and cash payments are conducted through bank current account.
The bank statement shows credit balance of Rs. 32 000. It is deviated with cash control account by
only unrealized cheque Rs. 18000.
The following informations are extracted from cash receives journal, Cash payment journad and bank
statements.
Rs
Cash reveives journal total for the month of March 130, 000
Cash payment journal total for the month of March. 115, 000
Realized cheque in March. 128, 000
Omitted items in cash control account are as follows 102, 000
Direct deposit. Rs. 9000
Bank charges Rs. 3000

06) Unpresented cheque and unrealized cheque for the month of march are, respcetively.
1) Rs. 13000 Rs. 2000 2) Rs.13000 Rs. 20000 3) Rs. 22000 Rs. 12000
4) Rs. 16000 Rs. 20000 5) Rs. 13000 Rs. 16000 (…..…..)

07) Cash control account balance that is shown in financial position statement as at 31.03.2019.
1) Rs 71000 2) Rs 56000 3) Rs 27000 4) Rs 22000 5) Rs 20000 (…..…..)

08) The March 2019 month information for Ahilan business that is reqister under the VAT are as
follows.
Sales value including VAT 10% Rs. 176 000
Purchases Rs 90, 000 (VAT 10% excluded)
Purchase return including VAT 10% Rs. 5500
Paid VAT Rs. 3500
Calculate the VAT account balance that are shown in financial position statements.
1) Liability Rs. 7500 2) Assets Rs. 4000 3) Liability Rs. 4000
4) Assets Rs. 5650 5) Liability Rs.5650 (…..…..)

09) Any claim in the following statements regarding the debtors control account is correct,
1) There will not be a credit balance of debtors control account.
2) All sales will be recorded in the sales joiunals.
3) The total of sales journal will be recorded in the debtors control account.
4) The individual control account will be maintained in relation to every debtors.
5) On all occations, the debtors control account balance will be equal to the total balance of the
debtors ledger. (…..…..)

10) The following information belongs to the Pavithra Public company.

2018.08.31 2017.08.31
Accrued Electricity 50000 -
Pre paid rent 12000 80000
The electricity was paid by cheque at Rs 180000 during the year. At the
same time, the monthy rent is paid Rs. 40000.
How much is the elecricity and the rent paid, the value show in the profit or loss statement for the
year ended 31.08.2018.
Elecricity (Rs) Rent (Rs)
1) 180> 000 480> 000
2) 180> 000 520> 000
3) 230> 000 412> 000
4) 230> 000 520> 000
5) 230> 000 440> 000 (…..…..)

Grade - 13 (2019) 2 Accounting – I

 11) Sulaman’s business is not maintaining a complete accounting system. The information taken for the
year ended 31.03.2019 are as follows.
Rs
Stocks as at 01.04.2018 38000
Total of purchase journal 122000
Total of purchase column in cash payment journal 144000
Total of sales column in cash receives journal. 320000
Note :- The sales includes a 25% profit on cost. What is the value of closing stocks as at end of the
year 31.03.2019?
1) Rs 68 000 2) Rs 38 000 3) Rs 58 000 4) Rs 48 000 5) Rs 56 000
(…..…..)

12) It is an opportunity to stay away from the hostorical concept when reporting transactions and events?
1) Purchasing goods with resale Pursose.
2) When the enployee’s salary is reported.
3) When evaluationg the value of stocks at the end of year based on LKAS – 02.
4) When the stocks are evaluated based on FIFO.
5) When measuring the value of mechine according to the LKAS – 16. (…..…..)

13) The information of three commodity items as at 31.03.2019 are as follows.

Items Cost (Rs) Expected sals Expected sales expenses (Rs)

value (Rs)
X 10000 12000 1000
Y 20000 18000 -
Z 5000 6000 1000

What is the value of stock listed in financial position statement based on LKAS : 2 ?
1) Rs 35 000 2) Rs 36 000 3) Rs 37 000 4) Rs 33 000 5) Rs 32 000
(…..…..)
14) Kamal is conducting a separate manufacturing factory and sales out lets, The existence of goods was
distroyed due to fire in the trade in 2019.03.31.
Raw materials Finished goods.
Stocks as at 01.04.2018 100 000 200 000
Purchase of raw materials 420 000
Stocks as at 31.03.2019 50 000
 Production cost except direct material cost in the financial year. Rs. 180000
 Total sales income in the financial year. Rs. 900000
 The business sells goods with 20% of the profit on the production cost.
The total production cost and the value of distructive products respectively are,
1) Rs 650 000 Rs 50 000 2) Rs 650 000 Rs 100 000 3) Rs 650 000 Rs 150 000
4) Rs 700 000 Rs 130 000 5) Rs700 000 Rs 100 000 (…..…..)

Grade - 13 (2019) 3 Accounting – I

 15) In order to present such information to reveal the reliability of the information presented through
financial statement.
1) It should be perfect, neutrality and accuratly.
2) Be sure to be valid and timely.
3) It should be appropriate, timely and Appropriateness with timly.
4) Be sure to be valid timely and accuratly.
5) Being comparable and conforming. (…..…..)

16) The informations taken in a non profit organization are as follow.

The number of members on the 31.03.2018 is 150. Of these, 50 are the life members. The annual
membership fee of one of the remaning members is Rs 1000. 12 members did not pay membership
fee for 2017 / 201/8. 8 members is paid membership fee for 2018 / 2019. Life time membership fees
the remaining balance is Rs 200 000 in 2017.04.01. Inwhich, 10% of the total amount will be
transferred to the Income and expenses account account as membership fee in the year 2017 / 2018.
At the begining of the year there is no arrears or advance membership fees received within the year?
What is the membership fees income of 2017 / 2018 and membership fees received within the year?
Value to be seen as Membership fee receive
income (Rs) within the year (Rs)
1) 96 000 120 000
2) 120 000 100 000
3) 120 000 96 000
4) 120 000 120 000
5) 150 000 96 000 (…..…..)

17) What are the correct statements in the following statement regarding to the partnership?
A - Total ownership increases when adjusting the goodwill of the patnership business through
capital account.
B - Total ownership will be reduced when tranffering retirement partner’s equity to loan account.
C - When paying part of the business expenditure by partner. It does not affect the entire
ownership of business.
1) B only 2) A, B only 3) A, C only
4) B, C only 5) A, B and C (…..…..)

18) Credit balance of current account of Aruna and Karuna partnership business as at 31.03.2019 are
given below.
Aruna 140 000
Karuna 120 000
It was later discovered that no adjustment was carried out when preparing currect account in the year
end 2019.03.31. But profit or loss statement coorectly prepared.
 Karuna had paid Rs 25000 as rent for business in his own money.
 Aruna’s own income tax was paid Rs. 12000.
 The salary of Aruna and Karuna has not been recorded in current account Rs. 40 000 per
partner.
What is the answer to the correct current account balance of Aruna and Karuna for the year ended in
2019.03.31 after the adjustments were made?
Aruna (Rs) Karuna (Rs)
1) 148 000 205 000
2) 168 000 185 000
3) 205 000 123 000
4) 205 000 148 000
5) 205 000 275 000 (…..…..)

Grade - 13 (2019) 4 Accounting – I

 19) The following transactions and events took place in a limited public company.
A - Capitalization of reserves.
B - Right issues to all share holders.
C - Transffering to general reserves from retained profit.
D - The equipment is revalued for the fist time with surplus.
Which of the above transactions and events will result in the increase in the ownership of the
company?
1) A and B 2) B and D 3) C and D
4) A, B and D 5) A, B, C and D (…..…..)

20) What can be considered as a accounting estimates and changes in accounting estimates according to
the LKAS – 08 ?
A - Use ful life time.
B - Net value of stocks.
C - Depreciation methods for property plant and equipments.
1) A only 2) A and B 3) A and C
4) B and C 5) A, B and C (…..…..)

21) Ledger account balances of Nanda limited company as at 01.04.2018 are as follows.
Ordinery share capital (each Rs 30) 900 000
Revaluation reserve 200 000
General reserve 200 000
Cash 100 000
At the begining of 2018.04.20, all share holders are provided right issues according to the 3 : 1 ratio,
each share Rs 15. All right issues are accepted by the shareholders.
No. of shares Stated ordinery Cash account (Rs)
as at 31.03.2019 share capital (Rs)
1) 36 000 1200000 100 000
2) 40 000 138000 280 000
3) 40 000 1050000 250 000
4) 46 000 1380000 180 000
5) 46 000 1380000 280 000
(…..…..)
22) Which of the following circumstances that leads to the identity of provision for liability in financial
statement of the company?
A - Products are sold in a one year warrenty to ensure the correction of the repairs.
B - On the balance of debtos, Provisim for doubt ful debs are adjusted.
C - Without legal requirement, it is necessary to reduce the environmental pollution caused by
production process.
1) A only 2) B only 3) A, C only
4) B, C only 5) A, B and C (…..…..)

Grade - 13 (2019) 5 Accounting – I

 23) The company’s financial end is 31.03.2019. The directors were authorized to issue financial
statements on 30/ 06/ 2019. The company’s annual public meeting took place on 15.07.2019, The
following events related to the company took place after 31.03.2019.
A - Trade debtor valued Rs 250 000 as at 31.03.2019 who is announced as a bankruptcy on
30.04.2019.
B - Trade debtor values Rs 400 000 as at 31.03.2019 was announced as a bankrutcy on
10.07.2019.
C - Stock cost on 31.03.2019 Rs. 200 000 was sold for Rs 150 000 on 10.04.2019.
D - The market value of investment in the periods between 30.04.2019 and 30.06.2019 has
decreased by Rs 300 000.
1) A and B 2) A and C 3) B and C
4) A,C and D 5) B,C and D (…..…..)

24) What is the only answer to the contents of the cash flow under the financial activities when a limited
public company is presenting a cash flow statement?
1) Shares issues, Repayment of loan, and payment of loan interest.
2) Shares issues, Income tax payments and Dividend payments.
3) Lease initial deposit payment, lease payment, lease interest payment.
4) Lease payment, Received loan and Dividend payment.
5) Received loan, Dividend payment, Received dividend. (…..…..)

25) Current ratio of Suren company in 31.03.2019 is 2 : 1. What is the transaction that will increase the
ratio at which other factors remain constant?
1) Credit purchases.
2) Paid to creditros.
3) Settlement of non current liability.
4) Sales returns.
5) Credit purchase of motor van for business use. (…..…..)

26) Any of the following costs of a manufacturing company can be classified in to the direct cost?
A - The wages paid to employees based on the number of units to be produced.
B - Monthy salary paid to the factory manager.
C - Transport cost for bringing raw materials to the factory.
D - Machine depreciations used in factory.
1) A and B 2) A and C 3) B and C
4) A,B and D 5) A,C and D (…..…..)

27) Information about the raw material X of a company

Minimum usage Maximum usage.
Consumtions (units) 2000 5000
Lead time (month) 5 6
Maximum level of stocks 40000 units
This refers to the reorder level and economic order quantity.
Re order level EOQ.
1) 17 500 32 500
2) 20 000 30 000
3) 20 000 39 500
4) 30 000 20 000
5) 30 000 29 500 (…..…..)

Grade - 13 (2019) 6 Accounting – I

 28) The following information is provided by a commodity manufacturing company.
Prime cost Rs 600 000
Budgeted overhead cost - Manufacturing department Rs 350 000
- Service department Rs 50 000
No. of units produced - 75 000 units.
Budgeted machine hours - 50 000 (Mechine hours per unit is 5 hours)
Which of the following is the absorption rate for the machine hours and the production cost per unit?
Absorption rate for Production cost
machine hours Per unit (Rs)
1) 6 38
2) 7 43
3) 7 15
4) 8 16
5) 8 48 (…..…..)

29) Production level and production cost of product A that the company wants to produce are as follows,
Production level (units) Total cost (Rs)
5000 500 000
6000 540 000
The variable cost per unit and the total fixed cost respectively.
The varible cost per unit (Rs) Total fixed cost (Rs)
1) 40 200 000
2) 40 300 000
3) 50 300 000
4) 90 200 000
5) 100 300 000 (…..…..)

30) The net present value of an investment plan with completion of 5 years show a value of Rs 180 000
positive (+). the net cash flow of this project has been calculated to 10% discounted factor what is
the correct statement about this project?
1) Total benefit of the project is Rs 180 000.
2) Net profit of the project is Rs 180 000.
3) After the completion of the project, the net Profit will be Rs 180 000.
4) The cost of capital can be earned benefits more than 10% and Rs 180 000.
5) The cost of capital can be earned benefits more than 10 % and earned Rs 180 000. (………)
(30 x 4 = 120 Marks)
 Give short answer to question No 31 – 50.
31) The following transaction in one of the business belong to which type of accounting environmental
factor.
(A) Computer software currently used in business was replaced to new computer software due to
virus. ..................................................................

(B) Ordered to additional two containers rice for the Tamil Sinhala new year.
………………………………..................
(C) The business has to bear the extra cost of employes. If the EPF employes. Contributim has
been increase by government in the budget. ..................................................................

(D) Make chages in financial statement by obtain advice from charted accountants and LKAS.
..................................................................

Grade - 13 (2019) 7 Accounting – I

 32) Indra company returns goods wroth Rs 15000 on 01.01.2019 to his supplier, Sundaram Company
due do damaged goods. How is the informations show in Indra company’s books and Sundaram
Company’s books?
(Both company maintain the control accounts)
 In Indira company’s books.
a) Source document …………………………………
b) Prime entry book …………………………………
 In Sundaram Company’s books.
a) Debited account name ………………………………….
b) Credited account name ………………………………….

33) State appropriate prime entry books to record following transaction held in a business.
1) Business uses Rs 300 000 worth owner’s own furniture. ………………………
2) Returned cheque by bank when it was received fron debtor then deposited in bank.
………………………
3) Paid reimburshment to petty cashier Rs 2350 ……………………....
4) Received cheque value Rs 30000 from right issues. ………………………

34) Show as “Increase, decrease, or No change” the impact on assets, liability and equity due to the
following transactions of a business.
Assets Liability equity
1) Paid accrued electricity ……………… ……………… ………………
2) Charged bank overdraft interest
at the position of bank overdraft …………….... …………........ ……………....
3) Capitalization of retained profit ……………… ……………… ………………
4) Reimburshment of petty cash imprest ……………… ……………… ………………

35) The information of petty cash imprest of a business are as follows.

Petty cash balance as at 2019.01.01 Rs 800
Petty cash balance as at 2019.01.31 Rs 400
Petty cash reimbrushment on 2019.01.01 Rs 2200
If the value of the petty cash imprest will be increased by Rs 500, how much is the reimbrushment
value on 01.02.2019.
…………………………………………

36) The cash control account of Anoma business as at 31.03.2019 was Rs 80 000. On that day, bank
statement balance was deviated by the following reasons.
 Deposited cheque value Rs 20 000 has been dishonoured by bank.
 Direct deposit Rs 50 000 has not been recorded in cash control account.
 Unpresented cheque and unrealized cheque are Rs 80 000 and 55 000 respectively.
 Standing order payments for lease installment Rs 1000 has not been recorded in cash control
account.
Required :- Adjusted cash control account balance as at 31.03.2019 ………………………….
Bank statement balance as at 31.03.2019 ………………………….

Grade - 13 (2019) 8 Accounting – I

 37) State the accounting concept suitable for the following purposes.
Purpose Concepts
(A) The general measurement of economic activity
is sum of money …………………………………………..
(B) Specify the name of the business for
for financial statements …………………………………………..
(C) Cost of sales is deducted from sales
income …………………………………………..
(D) Received rent income and receivable rent income
are totally shown in profit or loss statement. …………………………………………..

38) Extracted information from trial balance as at 31.03.2018.

Description Debit Credit
Sales 2500 000

Additional informations.
1) Goods in sales value Rs 250 000 have been sent to supplier based on the condition of “non – sales
return” in 31.03.2018 only 50% of that goods were sold at 31.03.2018 and the sales price was
detemined by adding 25% profit on cost. These items need to be returned due to the time has
passed.
2) The value of closing stocks Rs 150 000 as at 31.03.2018.

a) What is the amount of sales income to be shown in the income statement for the year ended
31.03.2018. …………………
b) What is the value of the closing stocks to be shown in financial position statements?
…………………

 Answer the questions No 39 and 40 using following information.

The financial information of a business as at 31.03.2018. and 31.03.2019, which was started on
01.04.2017 with Rs 120 000 capital are as follows
31.03.2018 31.03.2019
Total assets 180 000 ?
Liabilities ? 50 000
Income 50 000 ?
Expenses 60 000 75 000
The owners drawings in the year ended 31.03.2018. and additional capital in the year ended
31.03.2019. are Rs 12 000 and Rs 25 000 respectively.
Increases in net assets as at 31.03.2019 is Rs 42 000.

39) What is the total liability as at 31.03.2018 ………………………….

40) a) The value of assets as at 31.03.2019 is Rs ………………………….
b) Earned total income for the year ended 31.03.2019 is Rs ……………………….....

Grade - 13 (2019) 9 Accounting – I

 41) Nirmal (PLC) company issued 50 000 ordinary shares at each Rs 50 for the year ended 31.03.2018.
It is needed Rs 15 000 shares issues expenses.
The company received applications for 70 000 shares with full of shares value and excess
applications were retured and paid shares value.
The balance as at 01 / 04 / 2017.
Rs
Stated capital 1200 000
Retained profit 700 000
a) The value of stated capital as at 31.03.2018 ……………….......
b) The value of retained profit as at 31.03.2018 …………...............

42) a) State the rules that are inclueded in partnership act of 1890, section 42.
…………………………………………………..
b) Name two equity account of partnership business.
………………………………………………….
………………………………………………….
43) State two decisions which are taken by board of directors of a company when received applications
for issuing shares.
……………………………………………………………………………
……………………………………………………………………………

44) The trial balance infromations of Amutha company as at 2019.03.31 are as follows.

Debit (Rs) Credit (Rs)

Land 900 000
Revaluation reserve for land 150 000

Additional informations
The Land is revalued as Rs 700 000 in this year.
Required :-
a) Write the double entries for above revaluation.
…………………………………………..
…………………………………………..
b) Summary of other comprehensive income.
…………………………………………..
45) The informations of Vishva Company for the year ended 31.03.2019 are as follows.
(Rs 000)
Annual depreciation 600
Profit for the year 6400
Paid income tax 1400
Income tax pexpenses for the year 1600
Paid annual interest 300
Accured interest 200
Increases in current assets except cash 1200
Dereases in current liability 800
Paid operating expenses 2000

Grade - 13 (2019) 10 Accounting – I

 Calculate the followings
1) Cash flow used in genarated activities 31.03.2019 …………………………
2) Net cash used in operating activities 31.03.2019 ………………………….

46) The informations for the month of May 2018 are as follows.
May 01 stocks 60 unit each Rs 80.
05 Purchaes 40 unit each Rs 90.
15 Purchases 50 unit each Rs 100
25 Sales 110 units
If FIFO method is used in stock pricing, Calculate the followings.
1) Cost of sales for the month of May 2018. ………………………………….
2) Value of stocks as at 31 May 2018. …………………………………

47) The following informations are extracted from payroll of a business.

A. Deducted EPF from employees is Rs 10000
B. Employer’s EPF expenses is Rs 15000.
write the double entry for transaction A and B.
A. ……………………………………………………………………………………………………
……………………………………………………………………………………………………
B. ……………………………………………………………………………………………………
……………………………………………………………………………………………………

48) Selling price and variable cost of a products are Rs 100 and 55 respectively and fixed cost for the
produts is Rs 450 000.
i) Break even point in sales income is ………………………….
ii) Value of margin of safty at the expected profit Rs 225 000 is ………………………….

49) A business expects to invest Rs 300 000 on machine. Its estimated values of net cash flows and
profit and profit after tax are as follows.
Year 1 2 3 4
Net cash flow (Rs) 90 000 120 000 180 000 150 000
Profit after tax (Rs) 40 000 60 000 80 000 60 000
a) Accounting rate of return (ARR) …………………………………..
b) Payback period? ………………………………….

Grade - 13 (2019) 11 Accounting – I

 50) A company has decided to start new project and the alternative ways and theri net present value of
projects are given below. (Initial investment value of each projects are equal value)
Projects NPV
A 150 000
B (50 000)
C 0
D 200 000
a) Which project will be sellected by business?
…………………………………………..............................
b) Give reason.
…………………………………………..............................
(20 x 4 = 80 Marks)
(Total 200 Marks)

Grade - 13 (2019) 12 Accounting – I

 Nothern Province Education Deparment
Model Paper
General Certificate of Education (Adv.level) Examination 2019

Accounting II 33 E II Three Hours

Instructions.
 Additional reading time – 10 minits.
 Answer only 5 questions including questions No. 01 and 02.
 Short answer for every question in new pages.
 Attach workins with answer sheet.
1) The sumerixed trial balance as at 31.03.2019 of the Visalini (PLC) Ltd is given below.

Description Debit Credit

Rs (000) Rs (000)
Net sales 18 000
Cash and cash equivalent 1 470
Bank loan interest 90
Trade receivable 620
Stocks as at 31.03.2019 400
General reserves 600
Retained earnings as at 01.04.2018 200
Revaluation reserve - Buildings 300
In come tax paid for the current year. 1 400
Provision for income tax (2017/ 2018) 220
Stated Capital – Ordinary shares. 5 700
12 % Bank loan. 1 000
Other income 1 660
Property, Plant and equiprent Carrying amount 14 000
Expenses 9 700
27 680 27 680

Additional information.
1) Last quater year end bank loan interst is accrued.
2) Cash and cash equivalents includs the followings.
Rs. (000)
Cash control account 540
Petty cash 30
Treasury bills (3 month Maturity) 900
1470

3) The value of trade receivable listed in trial balance is extracted after deducting value of trade
payable Rs. 280 000. A 10 % provision is made for doubtful debts on the year end balance of
trade receivables.

Grade - 13 (2019) 1 Accounts – II

 4) 50 000 ordinary shares were issued each at Rs 20 during the year and amount was received in
full has been recorded in the other income account. The rest of other income is the rent income
received by renting one portion of building.
5) Income tax paid includes Rs. 180 000 for the year 2017 / 2018 was estimated as 33 1/3 % on
profit before tax.
6) Expenses includs the followings
Rs (000)
Cost of sales 7000
Administration expenses 1700
Distribution expenses. 1000
9700

Administration expenses includes Rs (000)

Auditing fees 100 000
Directors fees 100 000
EPF expenses 210 000
Building depreciation 100 000
Computer equpment depreciation. 200 000

Distribution expenses incluedes. Rs (000)

Revaluation losses for trade receivable 400 000
Motor van depreciation 400 000
Motor van insurance expense – Pre paid 200 000

7) The composition of property. Plant and equipment as at 31.03.2019 are as follows.

(Rs. 000)
Land Motor van Buildings Computer Total
equpment
Cost 4000 6000 5000 2000 17000
Accumulated - (2000) (400) (600) (3000)
depreciation
Carrying Value 4000 4000 4600 1400 14000

Computer equpment and Land was revalued for the first time as Rs 1000 000 and Rs 5000 000
respectively and building not was revalued for the second time as Rs. 4000 000 on 31.03.2019. It
is yet to be recorded.

8) The board of directors proposed the followings.

a) Transfer Rs. 100 000 to general reserve from the Profit of the year.
b) Issue ordinary shares to existing shareholders by capitalizing Rs. 300 000 from retained
earnings.
9) A motor van valued at Rs. 1000 000 was acquired on 01.04.2018 on lease agreement. No. entry
has been mead in relation to this transaction but initial payment Rs. 200 000 has benn made and
debited in sales account. Annual lease installment is Rs. 250 000 for four years from 31.03.2019
including Rs. 50 000 lease interest equally.
The lease installment for the year ended 31.03.2019 has not year ended 31.03.2019 has not been
paid. But depreciation Rs. 200 000 for the year ended 31.03.2019 only has been calculated
properly and recorded.

Grade - 13 (2019) 2 Accounts – II

 Required
1) Statement of profit or loss and other comprehensive income for the year ending 31.03.2019.
2) Statement of changes in equity for the year ending 31.03.2019.
3) Statement of financial position as at 31.03.2019. (20 Marks)

2) a) The information of a business that sells similar types of travelling bags.

Expected sales of bags in carrent year 25000 bags.
Expected selling price per bag is Rs. 800.
Purchasing cost per bag is Rs. 300.
Expected annual fixed cost are as follows.
Salary Rs. 2000 000
Advertisment Rs. 1000 000
Other fixed Cost Rs. 2000 000
5000 000

Required.
1) Calculate the break ever point in No. of travelling bags and value.
2) Margin of safty in units and value.
3) Expected profit.
4) If the sales commission Rs 50 per bag is introduced. The number of bags required to be
sold to earn a profit Rs. 4000 000 per year.
5) Calculate the break even point in units of bags if it is assumed that the additional
advertisment expenses Rs. 3100 000 will be incurred and selling price will be increased by
5%. (05 Marks)

b) The Moratuva Ltd Produces the furniture required by customers. It has two production cost
centres, A and B in the factory. Futher, it has a service cost centre, C. The following budgeted
cost information are as follows.
(000)
Production Cost Centers (Rs 000) Service Cost
Centres (Rs 000)
A B C
Indirect Materials 240 90 15
Indirect wages 180 60 10
Indirect other expenses. 15 10 5

Other over head expenses (Rs 000)

Depreciation on Machinery 200
Rent, rates and electricity 150
Employees welfare expenses 100
Other informations.
A B C
Cost of machinery & equipments 1250 700 50
Floor area (Square meters) 30000 15000 5000
No. of employees 30 15 5
Direct labour (Hrs) 37000 33500 -

Grade - 13 (2019) 3 Accounts – II

 Service center provides services equaly to production Center A and B.
Direct Costs to produce furniture
Direct meterials Rs. 650 per furniture
Direct wages – Cost center A - 8 hours per hours Rs. 80.
B - 6 hours per hours Rs. 60.
Other direct cost per unit Rs 30.
Production over head cost are absorbed based on direct labour hours.
Profit mergin per furniture is 10% on Cost.

Required.
1) The production over head analysis sheet giving the bases of apportionment.
2) Production overhead absorption rates for cost centers A, and B.
3) Prepare Production Cost statement (Per unit) including following items.
a) Prime cost
b) Over head Cost.
c) Price per unit (10 Marks)

c) The following information related to a raw material receives and issue of Sundara Bava I
manufacturing business for the period of January to may.
01.01.2019 Purchases – 1000 units per Rs 10.
10.01.2019 Purchases – 260 units per Rs 10.50.
20.01.2019 Issued units 700.
04.02.2019 Purchases – 400 units per Rs. 11.50.
21.02.2019 Purchases – 300 units per Rs 12.50.
16.03.2019 Issued units 620.
12.04.2019 Issued units 240.
10.05.2019 Purchases – 500 units per Rs 11.
25.05.2019 Issued units 380.

Required.
1. Prepare store leadger using FIFO method.
2. Calculate the followings.
a) Total purchasing cost.
b) Total distribution cost.
c) Cost of closing stocks (05 Marks)
(Total 20 Marks)
3) a) The balances extracted from financial position statement
Rs. 000
Land 1400
Distribution Vehilcles 1000
Furniture and Fittings 500
Trading stocks. 165
Trade receivable 135
Cash control account balance 550
12% Bank loan 100
Trade payable 450

Grade - 13 (2019) 4 Accounts – II

 The following transactions were held in January.
1) Purchased goods costing Rs. 65 000.
2) Rs. 80 000 Cost of goods were sold for Rs. 115 000. In which Rs 75 000 Cash received
immediatly and balance is receivable.
3) Building rent for January has been paid Rs. 20 000.
4) Received Cash from trade receivable Rs. 100 000 after deducting 5 % discount.
5) Elilarasy paid insurance premium Rs. 500 for his owne vehicle from business money.
6) Elidarasy paid bank loan installment Rs. 6000 from his owne money including Rs. 1000
interest
Required
1. Show the impact of above transactions in given accounting equation format.
Assets Liabilities Equity

Property Trade Stocks Cash Trade Bank

Plant and receiveble receivable loan
equipment.

2. Calculate profit or loss for the month of January using net assets method. (05 Marks)
b) The assets and liabilities of upali business as at 01.04.2019 are as follow.
Rs. 000

Machinery and equipment 4250

Motor van 2750
Stocks 3240
Trade receivable control account 3600
Cash Cotrol account 1610
Bank loan 6150
Trade payable control account. 4500
Capital ?

 Trade receivable balance list. (Rs. 000)

Amal traders Rs 2250
Pimal expoters Rs 1350
3600
 Trade payable balance list. (Rs. 000)
Pratheep importers Rs. 2925
Rumesh enterprise Rs. 1575
4500

The transaction were held in April 2019 are as follows.

1) From cash payment vauchers. (Rs. 000)
01.04.2019 Machinery purchase 750
01.04.2019 Furniture purchase 150
02.04.2019 Owner’s drawings 1500
05.04.2019 Administration expenses. 900
10.04.2019 Distribution expenses 85
20.04.2019 Purchase 460
30.04.2019 Electricity 275

Grade - 13 (2019) 5 Accounts – II

 2) Received from receipts. (Rs. 000)
02.04.2019 Cash sales 12000
07.04.2019 Rent income 2000
12.04.2019 Additional Capital 200

3) The transactions were held with trade receivable for this month are as follows.

Customers Credit Sales Received Allowed Bad

sales return cash discount debts)
(Rs 000) (Rs 000) (Rs 000) (Rs 000) (Rs 000)
Pimal 1870 65 2510 12 2
exporters
Amal 3850 55 4950 18
traders
4) The transactions were held with trade payable for this month are as follows.

Suppliers Credit Purchase Paid cash Received

Purchase return (Rs 000) discount.
(Rs 000) (Rs 000)
Pratheep 3120 125 3450 44
importers.
Rumesh 2850 42 1560 19
enterprise.

Required,
1) Prime entry books.
2) Sales ledger accounts, sales ledger list, purchase ledger accounts and purchase ledger list.

3) Following accounts in general ledger.

- Trade receivable control account.
- Trade payable control account.
- Cash control account.
- Purchase account.
- Sales account.
- Machinery account.
- Furniture account. (15 Marks)
(Total 20 Marks)

4) a) The following transactions were held in Jaso business for the month of January 2018.

Debtors Balance as at Credit (10%) Received Allowed Bad

01.01.2018 Sales VAT cash discount debts
Salini 50000 30000 3000 60000 150
Sangavi 20000 10000 1000 24000 300 Full of
balance
Sambavi 16000 16000 1600 15000 600
Samini 14400 20000 2000 13000 280 400

Grade - 13 (2019) 6 Accounts – II

 Jaso business is registered for VAT collection.
Required :
1) Sales journal
2) Personal ledger accounts in sales ledger and debtors list balance.
3) Necessary accounts in generl ledger. (10 Marks)

b) Petty cash balance of Santhiya business as at 2019.01.01 is Rs. 2000.

The transaction which are conducted by petty, Cashier for the month of January 2019 are as
follows.
01.01.2019 Petty cash expensess are reimburshed Rs. 18000
05.01.2019 Loading expenses. 1000.
08.01.2019 Three wealer expenses. 800
10.01.2019 Cleaning expenses. 1100
14.01.2019 Unloading expenses. 900
16.01.2019 Owner’s drawings. 2000
18.01.2019 Car rent. 1500
20.01.2019 Cleaning expenses 1200
22.01.2019 Paid to creditor, Malathy 2500
23.01.2019 Rain ticket 1200
25.01.2019 Loading expense. 800

Required,
1) Petty cash payment journal.
(Using Loading and unloading, cleaning, travelling and other expenses columns)
2) Petty cash control account and other ledger accounts in general ledger.
(05 Marks)

C) Trial balance of vanavil business as at 31.03.2019 is as follows. It is registered for VAT

collections.
Description Debit Credit
Received discount. 5500
Purchase return. 3000
Capital 75000
Creditors control account. 42000
Sales 132000
VAT account balance. 2500
Property plant and equipment. 55000
Operating expenses. 13000
Stocks as at 01.04.2018 15000
Sales returns. 4000
Paid VAT 5000
Debtors control accounts. 65000
Petty cash balance. 3000
Purchase account 77000
Cash control account balance. 23000
260>000 260>000
Additional information.
1) Debit note and credit note are not included 10% VAT.
2) Purchase and Sales account are included 10% VAT. It should be adjusted.

Grade - 13 (2019) 7 Accounts – II

 Required :
1. VAT Control account.
2. Prepare profit or loss statement using closing stock value is Rs 28 000. (05 Marks)
(Total 20 Marks)

5) a) The bank reconcilation statements as at 28.02.2019 and 31.03.2019 are as follows.

28.02.2019 31.03.2019

Cash control account balance. 20 000 14 000

(+) unpresented cheques. 8 000 12 000
28 000 26 000
(-) unrealized cheque. (10 000) (8 000)
18 000 18 000

The informations are extracted from bank statement for the month of march 2019 are as
follows.
Realized or Credited deposits. 70000
Debited or presented cheque. 65000
Standing order payment 5000
Prepare :
1) Summary of cash control account for the month of March 2019.
2) Summary of bank statement for the month of March 2019. (05 Marks)

b) The informations extracted from income statement and financial position statement of unity
Sports Club for the year ended 31.03.2019 are as follows.
Statement of Income and expenditure.
Income : Life membership fees 15000
Membership fees 55000
Others 35000
105000
(-) Expenses : Written off receivable
member ship 2000
Other expenses 68000 (70000)
Surplus 35000
Financial position statement.
31.03.2018 31.03.2019
Property plant and equipment. 60 000 85 000
Receivable membership fees. 10 000 15 000
Receipts and payment account balance. 20 000 95 000
90 000 195 000
Accumulated fund. 70 000 105 000
Life membership fees. 10 000 60 000
Pre received membership fees. 5 000 10 000
Accrued expenses. 5 000 20 000
90 000 195 000

Grade - 13 (2019) 8 Accounts – II

 Additional informations.
Other expenses includes current year depreciation Rs 10 000.
Required :
1) Membership fees account.
2) Life membership fees account.
3) Receipts and payment account. (10 Marks)

c) The informtions of a manufacturing business for the month of 2018 are as follows.
No. of productions 1200 units
The time is taken to produce one unit is 15 minuts.
The No. of units are produced by following employers.
Kugan 400
Piraba 200
Jaso 400
Sami 200
1) Wages per one hour is Rs 100.
2) Giving additional allowences Rs 2000 to every 100 units of production.
3) Annual welfare association charges Rs 1200 are deducted equally from monthly salary.
4) EPF contributions of employer and employee are 15% and 10% respectively on total
salary.
Required.
1) Payroll for the month of May 2019.
2) Salaries control account. (05 Marks)
(Total 20 Marks)

6) a) Arani and Purani who share profits and losses equally, were partners of a service providing
business. Tharani was admited as a partner on 01.04.2018. The revised partnership agrrement
is as follows.
1) Profits and lossers are shared among Arani, Purani and Tharani in the ratio of 3 : 2 : 1
respectively.
2) Partners are entitled to an annual interest of 12% based on year end Capital balance.
3) Arani, Purani and Tharani are entitled to a monthly salary of Rs 40000, Rs 30000 and
Rs 50000 respectively.
4) Partners are entitled to an annual interest of 5% on the loans provided to the partnership.

Grade - 13 (2019) 9 Accounts – II

 The trail balance of the partnership as at 2019.03.31 as follows. (Rs 000)

Description Debit Credit

000 000
14% Fixed deposit. 3000
Cash balance 210
Property plant and equipment depreciation. 1200
Tharani loan interest. 60
Service providing expenses. 3750
Office expenses. 100
Other operating expenses. 1100
Property plant and equipment (Carrying value) 5000
Paid salary - Arani 400
Purani 280
Tharani 200
Cash brought by Tharani 400
Current account as at 01.04.2018 - Arani 200
- Purani 100
Capital account as at 01.04.2018 - Arani 1200
- Purani 1200
Comission income 200
loan from Tharani on 01.10.2018. 2400
Service income. 9800
15400 15400

Additional information.
1) Tharani brough the following as capital.
Motor van 600 000
Cash 400 000
How ever, only cash brough by Tharani has been recorded in the books of account.
2) Property plant and equipment is depreciated on cost at 10% per annum on straight – line
methods.
3) When Tharani was admited, the good will of the partnership was estimated as Rs. 1200 000.
All adjustments relating to good will are recoded through the partners capital account and
No good will account is maintained.

Required.
1) Profit or loss statement of partnership including appropriations for the year ended
31.03.2019.
2) Capital and current accounts of partners for the year ending 2019.03.31.
3) Financial position statement as at 2019.03.31. (10 Marks)

Grade - 13 (2019) 10 Accounts – II

 b) The following informations are extracted from financial statement of Mathavi Company.
Profit or loss and other comprehensive statement for the year ended 31.03.2019.
(Rs 000)
Sales (credit) 1560
(-) Cost of sales (936)
Gross profit 624
Other income
Dividend income 51
675
Expenses
Operating expenses 408
Depreciation 52
Interest 70
losses from motor van sales 5 (535)
140
(-) Income tax (45)
Profit for the year. 95

Financial position statement. (Rs 000)

31.03.2018 31.03.2019
Trade receivable 540 500
Trade stocks 162 150
Pre paid operating expenses. 15 7
Trade payable. 566 490
Accrued interest. 40 10
Accrued income tax. 20 15

Required :
31.03.2019 prepare the followings for the year ended.
a) Cash flows generated from operational activites using indirect method.
b) Cash flows generated from operational activities using direct method.
(05 Marks)

c) A manufacturing company is considering to replace the existing machine with a new machine to
improve the efficiency of its operations. The estimated cost of new machine are as follows.

Rs. 000
Purchase price 2500
Installation charges 200
Charges for engineer who installed machine 100
Site preparation expenses. 300

Grade - 13 (2019) 11 Accounts – II

 The following informations are given to you.
1) Old machine can be sold for Rs 600 000.
2) If the new machine is purchased, the current year working capital Rs 100 000 will be
increased to Rs 250 000. This increases will be recovered in 4th year.
3) The expected useful life time and residual value of new machine are 4 years and Rs. 200
000 respectively. Old machine’s useful life times are 4 years and no residua value.
4) The expected operating cash flow for the four years are as follows.

Cash receives (Rs. 000) Cash payments (Rs. 000)

Years Old New Old New
machine machine machine machine
1 800 1800 400 600
2 900 2300 500 800
3 900 2400 600 1100
4 800 2200 550 1300

5) Discounting factors at 10% for four years are as follows.

Year 1 2 3 4

Discounting factor 0.9 0.8 0.7 0.6

Required :
1) Initial net cash flow showing each items.
2) Annual cash inflows and out floms from year 1 to 4.
3) Net present value of new machine.
(05 Marks)
(Total 20 Marks)

Grade - 13 (2019) 12 Accounts – II