Question 4 (e)
Club: stationery consumed
2 marks
- Time to write
- About 4 minutes
From an older CBCS paper
Question
Question 4 (e) · 2 marks7.HIMALAYA CLUB, which also runs a Restaurant, gives you the information below:
- BALANCES, OPENING AND CLOSING
| Particulars | As on 1.4.2020 ₹ | As at 31.3.2021 ₹ |
|---|---|---|
| Furniture | 3,30,000 | ? |
| Sports Equipment | 3,30,000 | ? |
| China Glass, Cutlery etc., | 37,500 | ? |
| 6% Govt. Securities [Face value ₹ 4,50,000] | 3,75,000 | ? |
| Stock of Sports Materials | 4,500 | 750 |
| Advances to Suppliers of Sports Materials | 1,500 | 750 |
| Due to Suppliers of Sports Materials | 4,500 | 2,700 |
| Stock of Stationery | 3,000 | ? |
| Unpresented cheques (payment for stationery) | 1,350 | 450 |
| Subscription Outstanding | 7,125 | 5,250 |
| Subscription Received-in-Advance | 2,100 | 3,900 |
| Outstanding Miscellaneous Expenses | 7,125 | 5,250 |
| Miscellaneous Expenses paid in advance | 2,100 | 3,900 |
| Outstanding Wages | 7,500 | 6,000 |
| Cash Balance | 15,000 | 45,000 |
| Bank Balance (as per Pass Book) | 7,50,000 | ? |
| Stock of Provisions | 45,000 | 5,70,000 |
| Debtors for Provisions | 45,000 | 60,000 |
| Creditors for Provisions | 1,50,000 | 75,000 |
PAYMENTS: Suppliers of Sports Materials ₹ 16,200,Miscellaneous Expenses ₹ 1,11,675,Wages ₹ 76,500,Stationery ₹ 2,400, Furniture (Purchased on 1.10.2020) ₹ 2,25,000,Sports Equipment (purchased on 1.10.2020) ₹ 2,25,000,8% R.B.I Tax Free Bonds (bought on 1.1.2021) [Face Value ₹ 1,50,000] ₹ 1,18,800,Creditors for Provisions ₹ 15,75,000,Cash Purchases of Provisions – 1/11th of all Purchases.
RECEIPTS: Subscription ₹ 1,11,675,Interest on 6% Govt. Securities (After T.D.S. @ 10%) ₹ 12,150,Collection from Debtors for Provisions ₹ 13,35,000,Cash Sales of Provisions –10% of all Sales
4.Other Information:Rates of Depreciation:On China Glass & Cutlery, 20%, On Furniture, 10% p.a., and On Sports Equipment, 10%. The boarding expenses cost ₹ 41,250(₹ 30,000 of it for Restaurant staff).. Furniture with a book value of ₹ 30,000 as on 1.4.2020 was then sold, at a loss of 20%, on 31.12.2020.Write off 25% of Stationery.
Answer:
- For the year ending on march 31, 2021, calculate the stationery consumed to be debited to the income and expenditure account.[2 Marks]
[Note:Financial Statements in detail need not be prepared.]
Reworded from the university paper: names and figures differ, the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.
Before you write
Read off the question and its marks
Read from the question
- calculateFormula first, then the working, then the answer with its unit (₹, %, units).
What the paper leaves open
- The boarding expenses for restaurant staff are charged to the restaurant.
- Stationery: 25% of the stationery available is written off as consumed; the unpresented cheques are payments already in the cash book, and the bank balance at the year end is reconciled from the pass book.
- "7." before the club's name is kept as printed.
Write it in this order
- 1 Purchases and stationery available 1 mark 2 min
- 2 Consumption 1 mark 2 min
Try it first. About 4 minutes for 2 marks. Write it out, then open the solution.
Solution
Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.
Reading (paper note). The unpresented cheques are payments already recorded in the cash book, so the ₹2,400 paid for stationery is the year's purchase; the cheques not yet presented affect only the bank reconciliation, the balance as per the pass book differing from the books by the unpresented amount. 25% of the stationery available is written off as consumed. Only the part of a purchase that relates to the year is its expense; the rest is carried forward to the next year as stock.
| Particulars | ₹ |
|---|---|
| Opening stock of stationery | 3,000 |
| Add: purchases (as per the cash book) | 2,400 |
| Stationery available | 5,400 |
| Stationery consumed (25%) | 1,350 |
Closing stock of stationery: ₹4,050.
The other reading. If the ₹2,400 were the amount presented through the pass book, the year's purchases would be 2,400 − 1,350 + 450 = ₹1,500, as in the DU text's worked example of that kind; consumption would then be 25% × 4,500 = ₹1,125.
Where the 2 marks sit
| # | Component | Marks |
|---|---|---|
| 1 | Purchases and stationery available | 1 |
| 2 | Consumption | 1 |
| Total | 2 |
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