LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Sc.,B.A. DEGREE EXAMINATION – MATHEMATICS & ECONOMICS
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FOURTH SEMESTER – APRIL 2008
CO 4205 / 4201 – FIN. ACCOUNTS & FIN. STAT. ANALYSIS
Date : 24/04/2008 Dept. No. Max. : 100 Marks
Time : 9:00 – 12:00
SECTION A
Answer all questions: 10 x 2 =20 marks
- What is Overdraft?
- How does one treat recovery of bad debts in accounts?
- Differentiate between Cash discount and Trade discount?
- a. Only __________transactions are recorded in the Single Column Cash Book
- A ___________is a short explanation of the transaction.
- What is a voucher?
- Who are non- profit seeking concerns? Give examples
- List any two advantages of Subsidary books?
- Why is a Trial balanace prepared?
- Ascertain purchases from the following figures:
Cost of goods sold Rs. 80,700
Opening Stock Rs. 5,800
Closing stock Rs. 6,000
- Calculate the Capital fund by preparing Balance sheet:
Rs. Rs
Cash 6,000 Bank balance 35,000
Subscription outstanding 2,000 Furniture 20,000
Building 1,00,000 Salaries outstanding 4,000
SECTION B
Answer any five questions: 5 x 8 = 40 marks
- What are Assets? Discuss the various types of assets?
- Write a brief note on the importance of ratio analysis.
- Briefly explain the concepts which form the backbone of Accounting.
- Moon Ltd had a balance of Rs.75,000 in its Profit & Loss account on 1st April 2006. During 2006-2007, its profit before tax amounted to
Rs. 7,62,500. The income tax provision for the year amounted to be
Rs. 3,47,500. The company decided to transfer Rs. 60,000 to General Reserve, Rs. 87,500 to sinking fund for redemption of debentures, to pay a dividend for the financial year at the rate of 10%. The company’s share capital consisted of 3,00,000 shares of Rs. 10 each. Draw up the Profit & Loss Appropriate account.
- Statement of the financial position of Mr. Ram is given below:
Liabilities 2006 2007 Assets 2006 2007
Creditors 2,900 2,500 Cash 4,000 3,000
Capital 73,900 61,500 Debtors 2,000 1,700
Stock 800 1,300
Building 10,000 8,000
Land 60,000 50,000
——— ——— ———- ———
76,800 64,000 76,800 64,000
Additional information:
(i) There were no drawings
(ii) There was no purchase or sales of either building or other fixed assets.
Prepare a Statement of cash flow.
- Journalise the following transactions in the books of Mr. Hari for the month of January 2008
Rs.
1 Hari started business with capital 2,50,000
5 Purchased goods from Shankar 24,000
7 Purchased goods for cash 4,000
8 Purchased chairs 1,500
10 Proprietors drawings 1,000
11 Paid rent to the landlord , Mr. Ram 1,700
13 Received interest 1,000
15 Sold goods to Suresh 4,000
20 Paid to Shankar Rs.23,500 and discount received Rs.500
22 Paid salary to the Manager, Mr. Arun 2,000
- Prepare a bank reconciliation statement from the following:
Rs.
Bank balance as per Cash Book 18,500
Cheques deposited but not collected by the bank 6,000
Cheques issued but not presented for payment 4,500
Bank charges debited in the pass book 150
Dividend collected by bank not entered in the cash book 1,200
Insurance premium paid by the bank not entered in the
Cash book 350
- M/s Sathish & Co furnishes the following information for the month of January 2008. Prepare a Cash book with Cash and Bank columns:
Jan Rs.
1 Balance in Hand 1,000
Bank Overdraft 3,000
3 Issued a cheque to Sharma 500
5 Received a cheque from Mr. Charles and
Deposited into bank 1,000
7 Drew from bank for office use 500
9 Paid Life insurance premium in cash 250
15 Bank collected dividend 500
SECTION C
Answer any five questions: 2 x 10 =40 marks
- The following is the summary of cash transactions of Chennai Literary Club for the year ended 31st December 2007
Receipts Rs. Payments Rs.
To Balance from last year 3,190 By Rent & Rates 1,680
To Entrance fees 2,250 By Wages 2,450
To Subscription 16,000 By Lighting 720
To Donations 1,650 By Lecture fees 4,350
To Life membership fee 2,500 By Books 2,130
To Interest 140 By Office expenses 4,500
To Sale of furniture By Placed on 6%
(Book value Rs. 500) 720 fixed deposit 8,000
By Cash at bank 2,420
By Cash in hand 200
——– ——–
26,450 26,450
——– ——–
At the beginning of the year, the Club possessed Books worth Rs.20,000 and Furniture worth Rs.8,500. Furniture worth Rs. 500 was sold on 1.1.07 for
Rs. 720 as shown in the above cash summary. Ordinary Subscription in arrears at the beginning of the year amounted to Rs. 350 and at the end of the year Rs. 450.
Prepare Income and Expenditure Account of the Club for the year ended 31st December, 2007 and a Balance sheet at that date after writing off Depreciation at 5% per annum on Furniture and 10% per annum on Books.
Entrance fees and Donations to be capitalized.
- From the following Trial Balance of M/s Ram & Sons, Prepare Trading and Profit and Loss Account for the year ending on 31st December 2007 and the Balance Sheet as on that date
Dr. Cr.
Purchases and Sales 21,750 35,000
Discount 1,300
Wages 6,500
Salaries 2,000
Travelling expenses 400
Commission 425
Carriage inwards 275
Administration expenses 105
Trade expenses 600
Interest 250
Building 5,000
Furniture 200
Debtors 4,250
Capital 13,000
Cash 7,045
Creditors 2,100
——— ———
50,100 50,100
Additional information:-
Stock on 31st December 2007, was Rs. 6,000. Depreciate building by 20%. Create a provisions for bad debts at 10% on debtors. Outstanding wages
Rs. 475.
- Using the following data, complete the balance sheet below:
Gross profit ratio 20%
Current ratio 1.8
Stock turnover ratio 4times
Debt collection period 20 days
(360 days year)
Long-term debt to equity 40%
Total assets turnover ratio
(on sales) 0.3 times
Credit sales to total sales 80%
Gross profit Rs. 1,08,000
Share capital & Reserves and Surplus Rs. 12,00,000
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