LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
SECOND SEMESTER – APRIL 2011
CO 2104/2101 – FINAN.A/C & FINANCIAL STATEMENT ANALYSIS
Date : 09-04-2011 Dept. No. Max. : 100 Marks
Time : 1:00 – 4:00
SECTION A
Answer all the questions: (10 X 2 = 20 marks)
- Ideal current ratio for a concern is ______________
- Cost of goods sold = Net sales – _____________
- Calculate the tax provided during the year from the following information:
At the beginning of the year the Provision for taxation stood at Rs.25,000
At the end of the year the Provision for taxation stood at Rs. 30,000
Tax paid for the current year Rs. 40,000
- Compute profit or loss on sale of machinery
Original cost of Machinery Rs. 1,20,000;
Accumulated depreciation Rs. 49,000; Sale value of Machinery Rs. 75,000
- Who is a petty cashier?
- What is Bank overdraft?
- State whether the following expenditures are capital or revenue:
- Amount spent on heavy advertising to introduce a new product in the market
- Amount spent on making a few more exits in a Cricket ground to comply with Government orders.
- Classify the following accounts into personal/real/nominal
- Salaries Goodwill c. Interest received d. State Bank of India
- What is a Balance sheet?
- Give any two uses of ratio analysis.
- Calculate working capital turnover ratio.
Sales Rs.7,50,000 Current assets Rs. 4,00,000
Current liabilities Rs. 2,50,000
SECTION B
Answer any five questions: (5 X 8 = 40 marks)
- Who are the users of accounting information ? Explain the usefulness of accounting information from their angle.
- What are the uses and limitations of Cash flow analysis?
- What is the accounting treatment of following items by a non-profit organization.?
- Specific donation Life Membership fees c. Legacy
- Honorarium
- Enter the following in a Petty cash book . The petty cashier started with an imprest amount of Rs. 1,000 on 1st January2011
Jan Rs.
2 For window cleaning 50
5 One bundle of A4 sheet 100
7 Taxi fare to manager 75
9 Advertisement in Times of India 25
15 Railway fare to Salesman 125
20 Polishing office table 200
22 Paid for printing 26
25 Purchase of postage stamps 18
- From the following particulars, determine the maximum remuneration available to a full time director of a manufacturing company.
The Profit & Loss Account of the company showed a net profit of Rs. 40,00,000 after taking into account the following items:
Rs.
- Depreciation ( including special depreciation of Rs. 40,000) 1,00,000
- Provision for income tax 2,00,000
- Capital expenditure 5,00,000
- Donation to political parties 50,000
- Ex-gratia payment to worker 10,000
- Capital profit on sale of assets 15,000
- Prepare a Bank reconciliation statement as at 31st August 2010
The bank balance as per cash book Rs. 30,000
- Cheque for Rs. 5,000 was credited direct to the account but omitted to be recorded in the cash book
- Out of cheques amounting to R.3,700 drawn , cheques amounting to
Rs. 1,300 only are encashed.
- Bank charges amounting to Rs. 200 not entered in the cash book
- Bankers collected interest from investments Rs. 1,000
- A customer paid directly a cheque for Rs. 300 into the account
- As per the standing instructions the Bank paid the telephone bill Rs.1,000
- After taking into account the under mentioned items of Raja ltd it made a net profit of Rs. 1,00,000 for the year ended 31sr Dec 2010:
Rs.
Loss on sale of machinery 10,000
Depreciation on building 4,000
Profit on sale of building 8,000
Income tax refund 3,000
Preliminary expenses written off 5,000
Provision for taxation 10,000
Goodwill written off 5,000
Calculate operating profit before working capital changes.
- Calculate the amount of subscription and stationery to be shown in the Income and Expenditure account.
- Subscriptions received during the year 2009-10 is as follows:
(2008-09 Rs. 2,000: 2009-10 Rs. 30,000: 2010-11 Rs. 3000)Rs 35,000
Subscription outstanding as on 31st March 2009 were Rs. 3,500
Subscription outstanding as on 31st March 2010 were Rs. 2,000
Advance Subscription as on 31st March 2009 were Rs. 6,000
- Calculate the amount of stationery to be shown in the Income and Expenditure account.
Stock of stationery on 31-3-2010 Rs. 400
Stock of stationery on 31-3-2011 Rs. 500
Stationery purchased during the year Rs. 1,000
SECTION C
Answer any two questions: (2 X 20 = 40 marks)
- From the following transactions prepare a Triple column cash book of Anand for the month of August 2010:
Aug Rs.
1 Cash balance 20,000
Bank balance 25,000
5 Paid rent by cheque 5,000
7 Purchased goods from Charles for credit 20,000
10 Deposited into bank 10,000
12 Returned goods to Charles 1,000
14 Withdrew from bank for office use 1,000
16 Paid cheque to Charles in full settlement 8,950
20 Withdrew cash from bank for celebrating his birthday 5,000
22 Paid salaries by cheque 10,000
26 Suresh, a customer paid directly into bank 5,000
28 Paid for advertisement 1,000
29 Cash sales 7,000
- From the following Trial Balance , Prepare final accounts for the year ended 31st March 2011
Trial Balance
| Name of the account
|
Debit
Balances |
Name of the account | Credit
Balances |
| Purchases
Debtors Return inwards Furniture Rent Salaries Travelling expenses Cash Stock Discount allowed Drawings |
11,870
7,580 450 2,750 360 850 300 210 2,450 40 600 27,460 |
Capital
Bad debts recovered Creditors Return outwards Bank overdraft Sales Bill payable
|
8,000
250 1,250 350 1,570 14,690 1,350
_______ 27,460 |
Additional information:
- The closing stock on 31-3-2011 was Rs. 4,200
- Write off Rs. 80 as bad debts
- Create a reserve for bad debts at 5% on sundry debtors
- Three months rent is outstanding
- Depreciate furniture @ 10%
- From the following information, prepare Balance sheet with as many details as possible:
Stock turnover ratio 6 times
Capital turnover ratio (on cost of sales) 2 times
Fixed assets turnover ratio (on cost of sales) 4 times
Gross profit ratio 20%
Debtor’s velocity 2 months
Creditor’s velocity 73 days
Gross profit in a year amounts to Rs. 60,000. Reserves & surplus amount to Rs. 20,000. Closing stock of the year is Rs. 5,000 more than the opening stock
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