LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP
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SECOND SEMESTER – APRIL 2008
BC 2500/ CR 2501 – FINANCIAL ACCOUNTING
Date : 23-04-08 Dept. No. Max. : 100 Marks
Time : 1:00 – 4:00
PART – A
Answer ALL the questions (10×2=20 Marks)
- Specify any two functions of ‘Financial Accounting’?
- How are ledgers made ‘Self-Balancing’?
- Write a short note on ‘Shortworkings Lapsed’?
- How are ‘Inter-Departmental transfers treated’?
- What is ‘Average clause’ in a Fire insurance policy?
- Mention the ‘Journal Entry’ required for goods returned by branch to head office under ‘Stock and Debtors System’?
- A machine was purchased for Rs. 1,00,000 on 1-1-2004. The usual life of the machine is five years and the residual value is Rs. 20,000.
Find out the amount of depreciation to be provided every year under the straight line method?
- M/S Grace & Co., purchased a truck on 1-1-2001. The cash price being Rs.1,00,000. The purchase is on hire-purchase system. Rs. 30,000 has to be paid on the signing of the contract and thereafter, Rs. 40,000 has to be paid annually for two years interest was charged at 6%. Calculate the interest payable.
- Calculate the amount of Drawings from the following information?
Profits Rs. 1,20,000; Closing Capital Rs. 3,80,000 and opening Capital Rs.3,00,000.
- Net profit Rs.50,000; Fixed expenses [including depreciation] Rs. 80,000 and G.P.Ratio on turnover is 25%. What is Cost of Sales?
PART – B
Answer any FIVE questions (5×8=40 Marks)
- Distinguish between HIREPURCHASE AND INSTALMENT.
- Write short notes on the following:
- Consequential loss policy
- Hire purchase Trading Account
- General Ledger Adjustment Account
- Repossessed Stock
- Differentiate single entry system from Double Entry system?
- Machinery Account in the books of M/s HONESTY & Co., was as follows:
Balance as at 1-1-1986 Rs. 14,900
Purchase of machinery on 1-7-1986 Rs. 4,400
Sale of machinery on 1-10-1986 Rs. 1000.
The original Cost of machinery sold was Rs. 6000 on 1-7-1983.
Machinery is being depreciated at 10% p.a. on diminishing balance of the asset.
The books are closed on 31st Dec each year books .
Prepare the machinery account for the year endry 31st Dec 1986.
- From the following details, prepare Debtors Ledger Adjustment A/c in the General Ledger and General Ledger Adjustment A/C in the Creditors Ledger as on 31-12-1976.
Rs.
Debtors Balance as on 1-12-1976 ———————— 45,750
Creditors Balance as on 1-12-1976 ————————– 54,900
Transactions for the month of December:
Credit purchases ——————————– 20,500
Credit Sales ——————————– 22,700
Return Inwards ——————————– 400
Return Outwards ——————————– 600
Cash received from customers ———————– 25,000
Discount allowed to customers ———————– 550
Cash paid to creditors ———————– 30,700
Discount received from creditors ———————– 670
Acceptance received from Debtors ———————– 8,700
Creditors bills accepted ———————– 12,000
B/R returned dishonoured ———————– 1,200
B/P returned dishonoured ———————– 3,000
Bad debts written off ———————- 2,500
Sundry charges debited to customers ———————- 345
Allowances from creditors ———————- 275
- Mr. S. Vasanth and Mr. X. Peter started business on 1-1-2005 with capitals in the ratio of 2:3.
Their assets and liabilities on 1-1-2005 and on 31-12-2005 were as follows:
| 1-1-2005
(Rs.) |
31-12-2005
(Rs.) |
|
| Cash in hand & at bank …………………………. | 5,000 | 6,000 |
| B/R …………………………………………………….. | 3,000 | 4,000 |
| Sundry-in-trade…………………………………….. | 30,000 | 25,000 |
| Stock-in-trade………………………………………. | 4,000 | 5,000 |
| Fixed Assets ……………………………………….. | 70,000 | 60,000 |
| Creditors …………………………………………… | 8,000 | 5,000 |
The partners share profits in the ratio of 2:3 after charging interest on capital in the beginning @ 6% p.a. and after providing interest on Drawings @ 5% p.a.
Drawings on an average of 6 months are Rs. 10,000 for Mr. S. Vasanth and Rs. 15,000 for Mr. X. Peter.
Calculate profits and also ascertain the share of net profits after charging interest on capital and after providing interest on Drawings.
- A Bombay head office has a branch at Madras to which goods are invoiced at cost plus 25%.
From the following particulars, prepare the Branch A/c in the head office books:
|
Goods sent to branch ———————— |
Rs.
2,00,000 |
| Total sales ———————————— | 3,00,000 |
| Cash sales ———————————— | 1,00,000 |
| Cash received from branch Drs ———– | 1,80,000 |
| Branch Drs on 1-1-2006 ——————- | 30,000 |
| Branch stock on 1-1-2006 —————– | 1,00,000 |
| Branch stock on 31-12-2006 ————– | 70,000 |
- A fire occured in the premises of Mr. R. Chandran on 10th May 2006. In order to make a claim on their fire policies in respect of the stock, calculate the amount of claim from the following data. The stock salvaged was Rs. 7600
| 2003
(Rs) |
2004
(Rs) |
2005
(Rs) |
2006
(Rs) |
|
| Opening Stock —————— | 32,000 | 30,000 | 32,000 | 36,000 |
| Purchases —————- | 82,000 | 94,400 | 1,13,200 | 1,56,000 |
| Sales ——————— | 1,20,000 | 1,32,000 | 1,56,000 | 1,98,000 |
| Closing Stock ——————- | 30,000 | 32,000 | 36,000 | ? |
PART – C
Answer any TWO questions (2×20=40 Marks)
- Prepare Trading and Profit & Loss Account for the year ended 31st December 2006 and the Balance Sheet as at that date from the following particulars.
| DEBIT
BALANCES |
Rs. | CREDIT
BALANCES |
Rs. |
| Purchases ——————— | 40,000 | Capital ———————- | 50,000 |
| Return Inwards ————– | 1,500 | Return outwards ———– | 1,000 |
| Carriage Inwards ————- | 7,500 | Sales ———————— | 1,00,000 |
| Carriage Outwards ———– | 8,000 | Discount Received ——– | 5,000 |
| Office Expenses ————– | 10,000 | Sundry Creditors ———- | 42,500 |
| Rent for office —————- | 4,000 | ||
| Buildings ———————- | 50,000 | ||
| Furniture & Fixtures ——– | 20,000 | ||
| Sundry Drs ——————- | 15,000 | ||
| Cash in hand —————– | 1,000 | ||
| Cash at Bank —————– | 5,000 | ||
| Opening stock ————— | 10,000 | ||
| Salaries ———————– | 12,500 | ||
| Discount allowed ———– | 4,000 | ||
| Drawings ——————– | 10,000 | ||
| 1,98,500 | 1,98,500 |
Adjustments:
- Stock on hand on 31-12-2006 was estimated at Rs. 40,000 (including stationery stock Rs. 1000).
- Office expenses include stationery purchased Rs. 3000.
- Allow interest on capital @ 12% p.a.
- Carriage inwards include carriage paid on purchase of furniture Rs. 500.
- Stock destroyed by fire was Rs. 5000 and the insurance company accepted a claim of Rs. 2000.
- 1750 paid as rent of the office was debited to Landlord A/c and was included in the list of sundry debtros.
- On 1-1-2001, M/s RAGAM TRADERS purchased from M/s VASANTHAM BROTHERS five trucks costing Rs. 20,000 each on the hire purchase system.
It was agreed that Rs.25,000 should be paid immediately and the balance in three instalments of RS. 30,000 each at the end of each year.
M/S VASANTHAM BROTHERS charges interest @ 10% p.a. The buyer depreciates trucks @ 20% p.a. on the diminishing balance method.
The buyer paid cash down and two instalments but failed to pay the last instalment. Consequently, M/s VASANTHAM BROTHERS repossessed three trucks leaving two trucks with the buyer and adjusting the value of 3 trucks against the amount due.
The trucks repossessed were valued on the basis of 30% depreciation p.a on the written down value.
M/s VASANTHAM BROTHERS sold the trucks repossessed for Rs. 30,000 after necessary repairs amounting to Rs. 5,000.
Prepare necessary ledger accounts in the books of the parties.
- M/S KIRUBAI & COMPANY took from M/S FAITH & COMPANY a lease of a coal field for a period of 10 years from 1st January 2000 on a royalty of 75 paise per tonne of coal raised with a ‘Dead Rent’ of Rs. 3000 a year and a power to recoup shortworkings during the first 5 years of the lease.
The annual outputs were as follows:
Year Outputs
- 1000 tonnes
- 3000 tonnes
- 8000 tonnes
- 2000 tonnes
- 8000 tonnes
Prepare ledger accounts in the books of M/S KIRUBAI & COMPANY.
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