LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
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FIRST SEMESTER – APRIL 2008
CO 1500 – FINANCIAL ACCOUNTING
Date : 03-05-08 Dept. No. Max. : 100 Marks
Time : 9:00 – 12:00
PART – A
Answer ALL Questions (10 x 2 = 20 marks)
- What is Trial balance?
- Explain the term ‘Depreciation’.
- Calculate the Sales: Cost of goods sold Rs. 1,00,000 & Rate of gross Profit on sale 20%?
- What are Self-balancing ledgers?
- Write a note on Stock and Debtors System.
- What is the meaning of Departmental Accounts?
- Calculate Cash price if Hire Purchase is Rs. 1,00,000 and Interest is Rs. 25,000.
- Calculate Short working, if minimum Rent is Rs.5000 & Royalty Rs. 3000.
- What is loss of profit insurance?
- How is the loss of stock computed?
PART – B
Answer any FIVE Questions (5 x 8 = 40 marks)
- Differentiate between Hire Purchase & Instalment System.
- From the following details Calculate Capital in the beginning?
Rs.
Profit made during the year 2,400
Drawings 1,200
Capital at the end 8,000
Capital introduced during the year 2.000
- ‘A’ keeps General ledger. Prepare Debtors Ledger Adjustment a/c & Creditor Ledger Adjustments as they would appear in General Ledger from the following particulars.
Rs.
Jan.1 Creditors’ balance 40,000
Jan.1 Debtors’ balance 50,000
Transactions during the month of January were as under:
Rs. Rs.
Credit Sales 20,000 Discount
Received from Creditors 200
Sundry Charges debited to
Customers 300 Bills Receivable dishonoured 400
Cash received from customers18,000 Bills payable 3000
Discount allowed 200 Bills payable dishonoured 300
Bills Receivable received
from Debtors 10,000
Paid cash to creditors 25,000
Credit purchases 21,000
Purchase Returns 500
Sales Returns 200
Allowances from Creditors 100
Bad debts 1,000
- Mr. R of Cochin has opened a branch at Chennai which sells goods for cash only. The following are the transactions between Branch Office and the Head office for the year ended 31.12.2007.
Rs. Rs.
Opening Stock 2,00,000 Cash Sent to Branch for Rent 2000
Goods supplied to Branch 5,00,000 Cash Sent to Branch for other
Expenses 1000
Cash received from Branch 6,00,000 Closing Stock 1,50,000
Petty Cash balance on 31.12.2007 100
Prepare Chennai Branch Account.
- The following purchases were made by a business having three Departments:
Dept. X — 1000 units
Dept. Y — 2000 units
Dept. Z — 2400 units
Stock on 1st Jan were
Dept. X — 120 units
Dept. Y — 80 units
Dept. Z — 152 units
The Sales were:
Dept. X — 1020 units @ Rs. 20 each
Dept. Y — 1920 units @ Rs. 22.50 each
Dept. Z — 2496 units @ Rs. 25 each
Prepare Department Trading Account.
- On 1st Jan 2004, ‘A’ bought a television from a seller under Hire purchase system, the cash price of which being Rs.10,450 as per the following terms.
- 3000 to be paid on signing the Agreement.
- Balance to be paid on three equal installments of Rs. 3000 at the end of each year.
- The rate of Interest charged by the seller is 10% p.a
Calculate Interest paid by the buyers to the seller each year.
- A company leased a colliery on 1st Jan 2004 at a Minimum Rent of Rs. 20,000 per year, merging into a royalty of Rs. 1.50 per ton with a power to recorp short workings over the first 3 years of the lease. The output of the colliery for the first four years:
2004→ 9000 tons 2006 → 16,000 tons
2005→12000 tons 2007→20,000 tons
Pass Journal entries.
- Fire occurred in the premises on 1.1.2008 and the business books and records were saved. The following information was obtained.
Rs.
Purchases for the year ending 30.06.2007 60,000
Sales for the year ending 30.06.2007 90,000
Sales from 1.7.2007 to 31.12.2007 35,000
Purchase from 1.7.2007 to 31.12.2007 50,000
Stock on 30.06.2007 28,000
Stock on 30.06.2007 28,000
Stock on 30.06.2006 40,000
Calculate the amount of claim to be presented to the insurance company in respect of the loss by fire.
PART – C
Answer any TWO of the following Questions (2 x 20 = 40 marks)
- Thomas does not maintain his books in the Double entry system and Bank Accounts. From the following information.
Prepare P/L a/c and Balance Sheet as at June 30, 2005
(A) Assets and Liabilities 30-06-2004 30-06-2005
Rs Rs
Stock 19,800 1,13,200
Creditors 31,000 14,500
Debtors 1,18,000 1,25,000
Premises 90,000 90,000
Furniture 11,000 11,500
Air-Conditioner 15,000 15,000
(B) Creditors as on 30-06-2004 includes Rs.15000 for purchase of Air-Conditioner.
(C) Cash transactions: Rs.
Cash as at July 1, 2004 15,000
Collections form customers 1,60,800
Payments to Creditors (Trade) 1,44,000
Rent, Rates & Taxes 11, 000
Salaries 1,12,000
Sundry expenses 18,000
Sundry Income 16,500
Drawings by Thomas 30,000
Loan from Mrs. Fernandes 23,000
Capital introduced 12,000
Cash sales 11,500
Cash purchases 15,000
Paid to creditor for Air-Conditioner 15,000
(D) Bad debts written off 1,200
- Crown Industries, Mumbai has a branch at Madurai to which goods are invoiced at cost plus 25%. The branch makes sales both for cash and on credit. Branch expenses are paid direct from head office and the branch remits all cash to head office.
From the following details, prepare the necessary ledger accounts in Head Office books to calculate branch profits as per the Stock and Debtors System.
Goods received from H.O at invoice price 60,000
Returns to H.O at invoice price 1,200
Branch stock on April 1, 2002 at invoice price 6,000
Cash sales 20,000
Credit sales 36,000
Branch debtors on April 1, 2002 7,200
Cash collected from debtors 32,000
Discount allowed to debtors 600
Bad debts in the year 400
Goods returned by debtors to branch 800
Rent, rate and taxes at branch 1,800
Branch office expenses 600
Branch stock at invoice prince on March 31, 2003 12,000
- The M & Co. acquired 5 machines on Hire-purchase system from the V & Co. _____ the cash price for each machine being Rs. 5000. The price was payable in five(5) installments of Rs. 1100 each, every year, the first being paid on signing the contract and the installments included interest charged at 5% per annum. The M & Co decided to provide depreciation at 10% per annum calculated on the diminishing balance method. It paid the first installment due at the end of the first year but could not pay the next.
Give the necessary ledger Accounts in the books of both parties for two years if the V & Co agreed to leave 3 machines with the M & Co adjusting the value of the other 2 machines against the amount due. The machines were valued on the basis of 20% depreciation annually. The Hire vendor spent Rs. 400 on getting the machines thoroughly overhauled and sold them for Rs. 8,800.
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