LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION

AP 3

SECOND SEMESTER – APRIL 2008

BU 2500 – FINANCIAL ACCOUNTING

 

 

 

Date : 23-04-08                  Dept. No.                                        Max. : 100 Marks

Time : 1:00 – 4:00

PART – A

Answer ALL questions.                                                                    (10 x 2 = 20marks)

1. What is Balance Sheet?
2. Purchased a machinery on 1.7.2005 for Rs. 40,000; sold on 1.8.2007 for Rs. 28,000; Depreciation on WDR @ 10% p.a Calculate profit or loss. Books are closed on 31^st Dec.
3. Calculate Capital introduced from the following details: Capital in the beginning Rs.5000; Capital at the end Rs.13,000; Profit made during the year Rs.2000.
4. What are Self-balancing ledgers?
5. Write a note an Dependent branch.
6. What is the meaning of Inter-Departmental transfer?
7. Write a note on Hire-Purchase trading Account?
8. Calculate short workings, if Minimum Rent in Rs.10,000; and actual Royalty is Rs. 8,000.
9. How is the loss of stock computed?
10. Explain Average clause in insurance policy.

 

PART – B

Answer any FIVE questions.                                                           (5 x 8 = 40 marks)

1. Distinguish between Hire purchase and instalment.
2. Alfred maintains books on single entry system. He gives you the following information:

Rs.

Capital on January 1, 2007                 15,200

Capital on 31^st Dec 2007                    16,900

Drawings made during 2007                4,800

Capital introduced on Aug 1, 2007      2,800

 

Calculate Profit made by Alfred.

 

1. Below are given particulars from the books of a trader for the month of January.

Rs.                                                      Rs.

Jan. 1   Opening balance         30,000 Bills receivable dishonored     1500

Jan 31  Total Sales (Jan)          90,000 Discount allowed

to Debtors                                400

Sales Returns                               500 Bad debts                                  350

Cash from Debtors                  40,000 Transfers from

other ledger                              750

B/R received                           15,000

Prepare Debtors Ledger Adjustment a/c in general Ledger.

1. M/s. Thomas & Co invoiced goods to their branches at cost. From the following details, relating to branch, prepare Branch Account for 2007 and Calculate profit.

Rs.                                                        Rs.

Debtors on 31^st Dec. 2007      2000    Discounts to Customers              40

Goods sent to Branch             7000    Stock (1.1.2007)                     2000

Goods Returned by Branch      800    Stock (31.12.2007)                 1600

Goods Returned by Customers

to Branch          150    Bad debts                                    70

Cash Sales                               4300    Rent Paid by Head office       1300

Credit Sales                             6000    Insurance by Head office       1800

Cash remitted to H.O           11300    Salaries & Wages by

Head office                 2800

1. The following purchases were made by a business hense having three departments:

Department A — 1000 units

Department B — 2000 units   @ a total Cost of Rs. 1,00,000

Department C — 2400 units

 

Stock on 1^st January were:

Department A — 120 units

Department B —   80 units

Department C — 152 units

 

The sales were

Department A —1020 units    at Rs. 20/- per unit

Department B— 1920 units    at Rs. 22.50/- per unit

Department C— 2496 units    at Rs. 25/- per unit

 

Prepare Departmental Trading Account.

 

1. Mr. A bought a machine under Hire purchase agreement, the cash price of the machine being Rs. 18000. As per the terms, the buyer has to pay Rs. 4000 on signing the agreement and the balance in four instalments of Rs. 4000 each, payable at the end of each year. Calculate the interest chargeable at the end of year.
2. Ram Tiles Ltd., obtained a lease of land from Landlord for a period of four years from Jan. 1, 2004, paying a minimum Rent of Rs. 8000 per annum, merging in a Royalty of 50 paise per ton of clay raised. The lease contains a clause to the effect that if the minimum Rent paid in any year exceeds royalty for the year, the amount of excess can be recouped by the lessee out of the royalty payable in the following year only. Clay is raised as follows:

2004 à 2000 tons;      2006 à 20,000 tons

2005 à 10,000 tons;   2007 à 32,000 tons

Show the ledger Accounts including Minimum Rent A/C.

1. A fire broke a out in a company on 1^st April 2007 and short sales remained for a period of six months; Total sales during this period amounted to Rs. 80,000, while in previous year form 1^st April 2006 to 30^th Sep. 2006 were of Rs. 2,00,000. Sales have increased by 10% in 2007 in the period from 1^st January 2007 to 1^st April 2007. Find out short Sales during this period of six maonths of 2007.

 

PART – C

Answer any TWO questions.                                                     (2 x 20 = 40marks)

1. ‘A’ carries on a small business, but he does not maintain a complete set of account books. He banks all receipts and makes all payments only by means of cheques. He maintains properly a cash book, a sales ledger and a purchase ledger. He also makes a proper record of the assets and liabilities as at the close of every accounting year. From such records you are able to gather the following facts:

Receipts                         Rs.                Payments                     Rs.

From Sundry Debtors             17625  New plant purchased                 625

Cash Sales                                 4125  Drawings                                 6725

Paid in by the Proprietor           2500  Wages                                     6725

Salaries                                    1125

Interest paid                                 75

Telephone                                   125

Rent                                        1200

Light & Power                                       475

Sundry Expenses                    2125

Sundry Creditors                    7625

(Purchase ledger Accounts)

 

Assets and Liabilities:             31.12.2006                  31.12.2006

Rs.                               Rs.

Sundry Creditors                        2525                            2400

Sundry Debtors                           3750                            6125

Bank                                              625                               –

Stock                                           6250                            3125

Plant                                            7500                            7315

From the above data, prepare profit & loss a/c for the year ending 31.12.2007 and

a Balance Sheet as on that data.

1. S & Co has its Branch at Kanpur, Goods are invoiced to the branch at selling price being cost plus 25% (on cost). From the following details prepare Branch Stock A/C; Branch expenses A/C; Branch Debtors A/C; Branch Adjustment A/C, Goods supplied to Branch A/C, Stock Reserve A/C.

Rs.                                                  Rs.

Cash Sales                   17400  Cash reveived from Debtors     5000

Credit Sales                   3600  Goods Supplied to Branch     19000

Rent & Rates                  900  Wages (Paid by Head Office)                760

(Paid by Head Office)                        Discount allowed to customers   200

Sundry Expenses            100  Goods returned by Customers    100

(Paid by Head Office)                        Opening Stock                                      3000

Goods Spoiled                              50

Opening Debtors           2000

1. ‘P’ purchased an asset on Hire-purchase system for Rs. 56000 payment to be made, Rs. 15000 down and 3 instalments of Rs. 15000 each at the end of each year. Rate of interest is charged at 5% per annum. Buyer is depreciating the asset at 10% per annum on written down value method.

Because of financial difficulties P after having paid down payment and first instalment at the end of 1^st year, could not pay second instalment and seller took possession of the asset. Seller after expending Rs. 357 on repairs of the asset sold it for Rs. 30,110.

Prepare ledger Accounts in the books of both parties to record the transactions.

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