LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
FIRST SEMESTER – APRIL 2012
CO 1500 – FINANCIAL ACCOUNTING
Date : 28-04-2012 Dept. No. Max. : 100 Marks
Time : 1:00 – 4:00
PART – A
Answer ALL the questions: (10×2=20 Marks)
- What do you understand by “Self – Balancing System of Ledger”?
- State any four objectives of preparing departmental accounts.
- What is minimum rent?
- Under stock and debtor system, cost of shortage is debited to
- a) Branch adjustment a/c b) Branch stock a/c
- c) Branch profit & loss a/c d) Goods sent top branch a/c
- Hire purchaser is in the position of a ———— with regard to goods obtained on hire purchase
- a) Creditor b) Debtor c) Bailor d) Bailee
- Salary paid to manager must be debited to:
- a) Manager’s A/c b) Office expenses A/c c) Salaries A/c d) Trading A/c
- A firm purchased a plant for Rs.60,000. Erection charges Rs.5,000. Effective life of the plant is 13 years. Calculate the amount of depreciation per year under Straight Line Method.
- A fire occurred in a firm on 10th Value of stock on that date was Rs.80,000, but it was insured for only Rs.56,000. Stock destroyed by fire was Rs.50,000. Find the claim.
- A purchased a machine on hire-purchase basis. The cash price of the machine was Rs.22,350. As per the terms, the buyer had to pay Rs.6,000 on signing the agreement and the balance in three annual instalments of Rs.6,000 each. Vendor charges interest at 5% p.a. Calculate the interest amount for the first instalment.
- Calculate debtors’ balance at the end:
Opening debtors Rs.40,000
Total sales Rs.1,60,000
Cash sales Rs.20,000
Cash received from customers Rs.60,000
Bad debts Rs.4,000
Returns inward Rs.1,000
Bills received from customers Rs.18,000.
PART – B
Answer any FIVE questions: (5×8=40 Marks)
- Distinguish between a Trail Balance and a Balance Sheet.
- State the advantages of “Self – Balancing System of Ledger.
- Give the differences between hire purchase and instalment purchase system.
- On 1st April 2001, Kumar purchased a secondhand machine for Rs.80,000 and spent Rs.20,000 on its
cartage, repairs and installation. The residual value at the end of its expected useful life of 4 years is
estimated at Rs.40,000. On 30th September 2003, this machine is sold for Rs.50,000. Depreciation is
to be provided according to straight line method. The Books are closed on 31st December every year.
Prepare Machinery Account.
- From the following particulars, calculate credit sales and credit purchases.
| (Rs.) | |
| Debtors as at 31.3.2002 | 28,000 |
| Debtors as at 31.3.2001 | 24,000 |
| Sales returns | 1,000 |
| Cash received from Debtors | 74,800 |
| Bills receivable drawn | 26,000 |
| Discount allowed | 1,000 |
| Bad debts | 1,000 |
| Cheques received from debtors | 10,000 |
| Bills receivable dishonoured | 4,000 |
| Cheque dishonoured | 6,000 |
| (Rs.) | |
| Balance of creditors on 31.3.2001 | 5,000 |
| Returns outwards | 3,000 |
| Cash paid to creditors | 25,000 |
| Discount allowed by creditors | 1,000 |
| Bills accepted | 5,000 |
| Balance of creditors on 31.3.2002 | 10,000 |
- Trading and Profit and Loss A/c of Janaki Radio and Gramophone Equipment Co. for the six months
ended 31.3.1993 is presented to you in the following form:
| Particulars | Rs. | Particulars | Rs. |
| Purchases | Sales | ||
| Radio (A) | 1,40,700 | Radio (A) | 1,50,000 |
| Gramophones (B) | 90,600 | Gramophones (B) | 1,00,000 |
| Spare parts ( C) | 64,400 | Spare parts ( C) | 25,000 |
| Salaries & wages | 48,000 | Stock as on 31.3.93 | |
| Rent | 10,800 | Radio (A) | 60,100 |
| Sundry expenses | 11,000 | Gramophones (B) | 20,300 |
| Profit | 34,500 | Spare parts ( C) | 44,600 |
| 4,00,000 | 4,00,000 |
Prepare departmental accounts for each of the three departments A, B and C mentioned above
after taking into account the following:
- i) Radios and Gramophones are sold at the show room and spare parts at workshop.
- ii) Salaries and wages comprise as follows: Show rooms ¾ and workshop ¼.
It was decided to allocate the show room salaries and wages in the ratio of 1:2 between the
departments A and B.
iii) The work shop rent is Rs.500 per month. The rent of show room is to be divided equally
between the departments A & B.
- iv) Sundry expenses are to be allocated on the basis of the turnover of each department.
- X purchased a type writer on hire – purchase system. As per terms, he is required to pay Rs. 800
down, Rs. 400 at the end of the first year Rs. 300 at the end of the second year and Rs. 700 at the end
of the third year. Interest is charged at 5% p.a. Calculate the total cash price of the typewriter and the
amount of interest payable on each installment.
- A fire occurred in the premises of Mr. Bean on 5.9.2002. All stocks were destroyed except to the
extent of Rs.5,000. From the following figures, ascertain the loss of stock suffered by him.
| Rs. | |
| Stock on 1.1.2001 | 30,000 |
| Purchases during 2001 | 1,50,000 |
| Sales during 2001 | 2,00,000 |
| Stock on 31.12.2001 | 40,000 |
| Purchases during 2002 upto the date of fire | 1,40,000 |
| Sales during 2002 upto the date of fire | 1,70,000 |
PART – C
Answer any TWO questions: (2×20=40 Marks)
- From the following Trial Balance as on 31.3.2006 and the adjustments given, prepare Trading and
Profit and Loss A/c for the year ending 31.3.2006 and the Balance Sheet as on 31.3.2006.
| Particulars | Dr. (Rs.) | Cr. (Rs.) | |
| Opening Stock | 15,000 | Capital | 25,000 |
| Machinery | 30,000 | Purchase Returns | 1,000 |
| Purchases | 40,000 | Bills payable | 5,000 |
| Sales Returns | 2,000 | Sales | 1,24,000 |
| Wages | 10,000 | Sundry Creditors | 5,000 |
| Salaries | 5,000 | Provision for doubtful debts | 500 |
| Office rent | 12,000 | Provision for discount on debtors | 100 |
| Insurance | 6,000 | ||
| Sundry Debtors | 20,000 | ||
| Cash | 4,000 | ||
| Bank Balance | 15,600 | ||
| Bad debts | 1,000 | ||
| 1,60,600 | 1,60,600 |
Adjustments:
- Closing stock at the year end was Rs.30,000
- Further bad debts amounted to Rs.500
- 5% of the profit is to be appropriated for creating Reserve fund
- Create 5% provision for doubtful debts on debtors
- Create 2% provision for discount on debtors
- Create 1% reserve on creditors.
- Madras Ltd., invoices goods to its branch at cost plus 331/3%. From the following particulars prepare
the Branch Stock Account the Branch Stock Adjustment Account and Branch Profit & Loss Account
as they would appear in the books of Head Office:
| Rs. | |
| Stock at Commencement at Branch at invoice price | 1,50,000 |
| Stock at Close at Branch at invoice price | 1,20,000 |
| Goods sent to branch during the year at invoice price | |
| (including goods invoiced at Rs. 20,000 to branch on | |
| 31.3.95 but not received by branch before close of the Year) | 10,00,000 |
| Return of goods to Head Office (invoice price) | 50,000 |
| Cash sales at Branch | 9,00,000 |
| Credit Sales at Branch | 50,000 |
| Invoice value of goods pilfered | 10,000 |
| Normal loss at Branch due to shortage and deterioration | |
| of stock ( at invoice price) | 15,000 |
| Madras Ltd. closes its books on 31st March, 1995 | |
| Goods lost in transit | 10,000 |
| Claim from insurance Co. | 8,000 |
- Mr. N wrote a book on Management and got it published with M/s Nachiar publications on the terms
that royalties will be paid @ Rs.5 per copy sold subject to a minimum amount of Rs.15,000 with a
right of recoupment of short workings over the first three years of the lease. From the following
prepare
(a) Royalties A/c, (b) Short working A/c and (c) Mr. N’s A/c.
The other details are:
Year No. of copies printed Closing stock
1991 2,000 100
1992 3,000 200
1993 4,000 400
1994 5,000 500.
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