Loyola College B.B.A. Business Administration April 2009 Financial Accounting Question Paper PDF Download

      LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION

JQ 03

SECOND SEMESTER – April 2009

BU 2501 / 2500 – FINANCIAL ACCOUNTING

 

 

 

Date & Time: 23/04/2009 / 1:00 – 4:00   Dept. No.                                                  Max. : 100 Marks

 

 

SECTION     A

      Answer ALL                                                                                    (10 x 2 = 20)

 

  1. State the objectives of providing depreciation.
  2. What is the difference between a branch and a department?
  3. Tick the correct answers:

(i) What type of account goodwill is? Fictitious / Intangible

(ii) On which side of the balance sheet is unexpired insurance shown?–Assets / Liability

  1. State whether the following statement is true or false:

Interest on capital and salary to a sole trader are incomes and hence are shown on the

credit side of profit and loss account. Justify your answer.

  1. What is meant by average clause?
  2. How do you allocate the following expenses in departmental accounts:

(i) Carriage inwards

(ii) Advertising

(iii) Lighting

(iv) General manager’s salary

  1. Prepare branch account from the following figures:

Rs.

Stock on 1-4-2008                                                                      14,900

Goods sent to branch                                                                  80,700

Expenses for branch                                                                     3,560

Cash sales at the branch                                                          1,10,330

Stock on 30-3-2009                                                                    18,640

  1. If the net profits and sales for the last accounting year are Rs. 15,000 and Rs.1,00,000 respectively and standing charges are Rs.15,000 out of which Rs. 5000 is uninsured, what is the gross profit ratio?
  2. From the following particulars of Mr. Bean, under single entry system, ascertain the total sales:

Opening stock Rs. 1,20,000, purchases  Rs. 6,00,000 , wages Rs.70,000 , closing stock Rs. 1,50,000,

the rate of gross profit on sales  20%.

  1. From the following details find out the credit purchases :

Rs.

Cash Purchases                            29,000

Creditors (opening)                      20,000

Creditors (closing)                       28,000

Allowances from creditors               800

Purchase returns                           1,500

Cash paid to creditors                  25,000

 

SECTION    B                                                                                                          

      Answer any FIVE only                                                                     (5 x 8 = 40)

  1. Explain the step to be taken to convert single entry on to double entry

12.. Explain the steps involved in arriving at the claim for loss of profits under consequential loss

policy.

  1. On 01.01.2004machinery was purchased for Rs. 80,000. On 01.07.2006 the

Machinery was replaced by new machinery costing Rs. 60,000 the vendor taking the old machine in part exchange at a valuation of Rs. 16,000. Show the machinery A/c upto 31.12.2007 assuming that the business charges depreciation @ 10% on the diminishing value of the machinery .

  1. Mr. Williams acquired vehicle from Moped Ltd. on hire purchase system on

1.1.1999 payable Rs. 1,000 down and the balance as under:

Rs. 1,300 at the end of first year.

Rs. 1,200 at the end of second year

Rs. 1,100 at the end of third year.

Interest is charged at 10% p.a. Write off depreciation at 20% on the diminishing balance method.

Ascertain the cash price and prepare vehicle account and Moped Ltd. account in the books of

Mr. Williams.

 

  1. The Sandur Iron Co. has taken on lease a mine on a royalty of Rs2 per tonne of iron ore raised

with a minimum rent of Rs. 40,000 per year, and power to recoup shorworkings during the first

three years was as under:

1st year 10,000 tonnes, 2nd year 24,000 tonnes, 3rd year 40,000 tonnes, 4th year 90,000 tones.

Prepare Minimum Rent A/c, Royalty A/c, Shortworking A/c and Landlord’s A/c in the books

     of the company. 

16.. Mr. Mano keeps his books of accounts under single entry system. His financial position on 31.12.2007and 31.12.2008 was as follows:

 

               Particulars: 2007

Rs.

2008

Rs.

Cash 9,860 800
Stock in trade 38,520 57,020
Plant & Machinery 54,420 61,000
Bills Receivable 16,480
Sundry Debtors 24,840 43,940
Sundry Creditors 72,040 80,000
Furniture 4,960 5,220
Drawings 5,000

 

During the year he introduced additional capital of Rs. 20,000. From the above particulars prepare a statement of Profit and Loss of Mr.Madan for the year ended 31.12.2008.

  1. Due to heavy fire in the godown of a company on15.06.2000, the entire stock was burnt except

some costing Rs. 3,500.  The books were, however, saved from which the following particulars

were obtained:

 

Rs.
Stock at cost 01.01.1999 36,750
Stock at cost 31.12.1999 39,800
Purchases for 1999 1,99,000
Wages for 1999 23,200
Sales for 1999 2,43,500
Purchases from 01.01.2000 to 15.06.2000 81,000
Sales from 01.01.2000 to 15.06.2000 1,15,600
  • The wages for the period amounted to Rs. 7,200
  • The company insured the stock for Rs. 20,000
  • The policy had an average clause.

Prepare a statement of insurance claim.

 

  1. A merchant sells goods at hire purchase system, the price being cost plus 50%. From

The following prepare the hire purchase trading account for the year ending  31.12.2001:

Stock at the shop at cost pricing (opening)                                              10,000

Stock with the customers at hire purchase price(opening)                       30,000

Installments due & unpaid (opening)                                                      13,000

Cash received from customers during the year                                     1,00,000

Goods repossessed during the year(installments due Rs. 4,000)

Valued at                                                     3,000

Goods sent to customers during the year at hire purchase price           1,20,000

Installments due and unpaid (closing)                                                      35,000

Stock with customers at hire purchase price (closing)                              21,000

Stock at the shop at cost (closing)                                                            12,000

 

                                                            SECTION      C

Answer any TWO only                                                                     (2 x 20 = 40)

 

  1. Prepare Trading, Profit & Loss A/c and Balance Sheet from the following Trial Balance of M. Madan.
Debit Balances Rs. Credit Balances Rs.
Sundry Debtors 92,000 Madan’s Capital 70,000
Plant & Machinery 20,000 Purchase Returns 2,600
Interest 430 Sales 2,50,000
Rent, Rates, Taxes & Insurance 5,600 Sundry Creditors 60,000
Conveyance charges 1,320 Bank Overdraft 20,000
Wages 7,000
Sales Returns 5,400
Purchases 1,50,000
Opening Stock 60,000
Madan’s Drawings 22,000
Trade Expenses 1,350
Salaries 11,200
Advertising 840
Discount 600
Bad debits 800
Business premises 12,000
Furniture & Fixtures 10,000
Cash in hand 2,060
4,02,600 4,02,600

Adjustments:

  1. Stock on hand on 31- 12 -06 ,Rs. 90,000
  2. Provide depreciation on premises at 2.5%; Plant & Machinery at 7.5% and furniture & Fixtures

at 10%.Write off Rs. 800 as further bad debts.

  1. Provide for doubtful debts at 5% on sundry debtors.
  2. Outstanding rent was Rs. 500 and outstanding wages Rs. 400. Prepaid insurance Rs. 300 .

 

  1. Bangalore head office has a branch at Chennai The goods are invoiced to the branch at cost

plus 50% .  From the following particulars prepare the necessary accounts in the books of the head

office under “Stock and Debtors System”

 

Stock on     1.1.2008 (at invoice price)                             12,000

Debtors on 1.1.2008                                                           6,000

Goods sent to branch (at invoice price)                            60,000

Cash sales                                                                          21,400

Credit sales                                                                       34,000

Cash received from debtors                                              29,200

Discount allowed to debtors                                                  800

Goods returned from debtors                                             2,000

Goods returned by branch to head office                           3,000

Cash sent to branch for: Salary                   4,000

Rent                      2,000

Sundry expenses      600              6,600

Deficit in goods at branch (at invoice price)                         600

Stock on 31.12.2008 (at invoice price)                            15,000

 

21.. From the following particulars furnished by a merchant who keeps his ledgers on self-balancing

system, prepare the Debtors Ledger Adjustment Account and Creditors Ledger Adjustment

Account as they would appear in General Ledger.

 

2007

Jan 1    Balance of  Trade Debtors

Balance of Trade Creditors

Jan 31  Credit Sales

Credit Purchases

Returns Inwards

Returns Outwards

Received Cash from Debtors

Discount allowed thereon

Cash paid to Creditors

Discount allowed by them

Received Bills Receivable

Accepted Bills Payable

Allowances to Debtors

Allowances from Creditors

Transfer from creditors ledger to debtors ledger

Bad Debts

Bills Receivable dishonoured

Interest charged on dishonoured bills

Balance of Trade Creditors(Dr)

  Rs.

30,000

20,000

1,20,000

75,000

5,000

800

40,000

1,000

60,000

1,200

70,000

10,000

500

50

150

450

2,000

500

200

 

 

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