LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP
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SECOND SEMESTER – APRIL 2007
BC 2500 / CR 2501 – FINANCIAL ACCOUNTING
Date & Time: 20/04/2007 / 1:00 – 4:00 Dept. No. Max. : 100 Marks
PART – A
Answer ALL the questions. (10 ´ 2 = 20 marks)
- Specify any four groups interested in ‘Accounting Information’?
- What is the need for providing depreciation?
- Write a short note on ‘Imprest System’?
- What should be the basis of allocation for the following expenses under
‘Departmental Accounts’?
(i) Carriage inwards (ii) Factory manager’s salary
- What do you mean by ‘Indemnity Period’ in Fire Insurance?
- Mention the ‘Journal Entry’ required when goods are repossessed under ‘Debtors system’?
- A machine was purchased for Rs.50000 on 1.1.2005. The useful life of the machine is five years and the residual value is Rs.10000.
Find out the amount of depreciation to be provided every year under the straight line method?
- M/s STAR & Co., purchased a plant on 1.1.2002. The cash price being Rs.25,000. The purchase is on hire purchase system. 10000 has to be paid on the signing of the contract and thereafter, Rs.10000 has to be paid annually for two years. Interest was charged at 5%.
Prepare Hire-vender account to show the interest payable?
- Calculate the amount of Drawings from the following information?
Opening capital Rs.6,00,000; Closing capital Rs.15,60,000 and
profits Rs.2,40,000.
- Net profit Rs.1,00,000; Fixed expenses (including depreciation) Rs.1,60,000 and G.P. ratio is 25% on turnover.
What is cost of sales?
PART – B
Answer any FIVE questions. (5 ´ 8 = 40 marks)
- Distinguish between Hire Purchase and Instalment purchase systems?
- Write short notes on the following:
(i) Royalty (ii) Inter-departmental transfers
(iii)Final accounts (iv) Book Debts
- What are the advantages of ‘Double Entry System’ of Book Keeping?
- M/s GOODLUCK & COMPANY purchased a plant on 1.4.2005 for Rs.70000. On 1.10.2005, further plant was purchased for Rs.40000. On 1.7.2006, the plant purchased on 1.4.2005 having become obsolete, was sold off for Rs.50000. Depreciation has to be charged at 15% on the original cost of the plant assuming that the accounts are closed every year on 31st
Prepare
(i) Plant Account (ii) Provision for Depreciation Account
- From the following details, prepare Creditors Ledger Adjustment a/c in the General Ledger and General Ledger Adjustment account in the Debtors Ledger as on 31.1.2002.
Rs.
Debtors Balance (1.1.2002) … 35,250
Creditors Balance (1.1.2002) … 48,750
Transactions for the month of January:
Credit purchases … 30,500
Credit sales …. 20,700
Return Inwards … 600
Return outwards … 800
Cash received from customers … 34,000
Discount allowed to customers … 700
Cash paid to creditors … 48,000
Discount received from creditors … 800
Acceptance received from Debtors … 10,000
Creditors Bills accepted … 14,000
B/R returned dishonoured … 2,000
B/P returned dishonoured … 4,000
Bad debts written off … 1,000
Sundry charges debited to customers … 400
Allowance from creditors … 300
- The following purchases were made by business house having three departments.
Dept. x : 852 units
Dept. y : 768 units at a total cost of Rs.20000
Dept. z : 594 units
Sales were as follows:
Dept. x : 53 units
Dept. y : 48 units
Dept. z : 61 units
Sales were as follows:
Dept. x : 864 units @ Rs.10.35 each
Dept. y : 715 units @ Rs.11.25 each
Dept. z : 583 units @ Rs.12.40 each
The rate of gross profit is same in each department.
Prepare Departmental Trading Account.
- A Calcutta head office has a branch at Bombay to which goods are invoiced at cost plus 20%
From the following particulars, prepare the Branch Account in the head office.
books. Rs.
Goods sent to branch … 1,20,000
Total sales … 1,50,000
Cash sales … 50,000
Cash received from branch Drs. … 40,000
Branch Drs on 1.1.2005 … 15,000
Branch Stock on 1.1.2005 … 60,000
Branch Stock on 31.12.2005 … 36,000
- A fire occurred in the premises of Mr. B. Rao on 7th June 2003.
In order to make a claim on their fire policies in respect of the stock, calculate the amount of claim from the following information. The stock salvaged was Rs.15,200.
2000 2001 2002 2003
(Rs) (Rs) (Rs) (Rs)
Opening Stock 64,000 60,000 64,000 72,000
Purchases 1,64,000 1,88,800 2,26,400 3,12,000
Sales 2,40,000 2,64,000 3,12,000 3,96,000
Closing stock 60,000 64,000 72,000 ?
PART – C
Answer any TWO questions. (2 ´ 20 = 40 marks)
- The under mentioned balances appeared in the books on
M/s PROSPERITY & COMPANY as on 31.12.2005.
Rs. Rs.
Share Capital 6.00,000 Manufacturing Expenses 3,59,000
(Authorised and Establishments 26,814
issued 60000 General charges 31,078
shares of Machinery 2,00,000
Rs.10 each) Motor Vehicles 15,000
General Reserve 2,50,000 Furniture 5,000
Unclaimed dividends 6,526 Stock (1.1.2005) 1,72,058
Trade creditors 36,858 Book Debts 2,23,380
Buildings 1,00,000 Interim Dividends 15,000
Purchases 5,00,903 Interest (Cr) 8,544
Sales 9,83,947 P & L A/c (Cr) (1.1.2005) 16,848
Investments 2,88,950 Staff Provident Fund 37,500
Depreciation Reserve 71,000
Cash Balance 72,240
Directors Fees 1,800
Adjustments:
- The stocks on 31.12.2005 were valued at Rs.1,48,680.
- Provide Rs.10,000 for depreciation on blocks and Rs.1500 for the Company’s contribution to the staff provident fund.
- Interest accrued on investment amounted to Rs.2,750.
- A claim of Rs.2,500 for workmen compensation is being disputed by the company.
- Establishment includes Rs.6,000 paid to the manager who is entitled to remuneration at 5% on net profit ascertained after charging such remuneration according to the companies Act subject to a maximum of Rs.10,000 per annum.
- On 1.1.2002, M/s RIGHT & COMPANY purchased from M/s WRONG & COMPANY five trucks costing Rs.80,000 each on the hire purchase system.
It was agreed that Rs.1,00,000 should be paid immediately and the balance in three instalments of Rs.1,20,000 each at the end of each year.
M/s WRONG & COMPANY charges interest @ 10% p.a. The buyer depreciates trucks at 20% p.a. on the diminishing balance method. The buyer paid cash down and two instalments but failed to pay the last instalment. Consequently, M/s WRONG & COMPANY repossessed three trucks leaving two trucks with the buyer and adjusting the value of three trucks against the amount due.
The trucks repossessed were valued on the basis of 30% depreciation p.a. on the written down value. M/s WRONG & COMPANY sold the trucks repossessed for Rs.1,20,000 after necessary repairs amounting to Rs.20,000.
Prepare necessary ledger accounts in the books of the both the parties.
- M/s NORMAL & COMPANY took from M/s ABNORMAL & COMPANY a lease of a Coal field for a period of 10 years from 1st January 1980 on a royalty of 40 paise per tonne of coal got with a ‘Dead Rent’ of Rs.5000 a year and a power to recoup shortworkings during the first 5 years of the lease.
The annual outputs were as follows:
Year Outputs
1980 3000 tonnes
1981 7000 tonnes
1982 15000 tonnes
1983 20000 tonnes
1984 25000 tonnes
Prepare ledger accounts in the books of M/s NORMAL & COMPANY.
X X X