Loyola College B.Com Corporate & Secretaryship April 2011 Financial Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SEC.

SECOND SEMESTER – APRIL 2011

BC 2501/BC 2500 – FINANCIAL ACCOUNTING

 

 

 

Date : 08-04-2011              Dept. No.                                        Max. : 100 Marks

Time : 9:00 – 12:00

 

PART – A

Answer all the questions                                                                                           (10×2=20 Marks)

 

  1. Show the necessary entries to adjust the following:
  2. Outstanding salaries 1,200
  3. Prepaid insurance premium Rs.450
  4. A firm purchased a plant for Rs.40,000. Erection charges Rs.2,000. Effective life of the plant is 5 years.

Calculate the amount of depreciation per year under Straight Line Method.

  1. What is single entry system?
  2. What do you understand by “Self – Balancing System of Ledger”?
  3. The Calcutta Trading Co. Ltd. opened a branch at Bangalore on 1st April 1993. From the following

particulars, prepare Bangalore Branch Account in H.O. Books.

Rs.
Goods sent to Bangalore Branch 40,000
Cheque sent to Branch for:
       Rent 4,000
       Salaries 5,000
       Other expenses 2,000
Cash received from Branch 60,000
Stock on 31st March 1994 8,000
Petty cash on hand, 31st March 1994 150

 

 

 

 

 

 

 

 

 

 

 

  1. From the following information, prepare a departmental Trading account of X Ltd., which has two

departments, A and B.

A B
Rs. Rs.
Opening stock 5,000 4,000
Sales 1,00,000 2,00,000
Purchases 75,000 1,50,000
Sales returns 10,000 8,000
Closing stock 4,000 3,000
Wages 3,000 4,000
Carriage inwards 1,000 2,000

 

  1. What is Instalment purchase system?
  2. What is minimum rent?
  3. From the following, calculate the amount of claim in respect of fire occured in a business on

31.12.02.

Sales from 1.4.02 to 31.12.02   Rs.12,00,000

Purchases from 1.4.02 to 31.12.02  Rs.8,00,000

Stock on 1.4.02  Rs.2,00,000

Gross profit 25% on sales.

 

  1. What is meant by loss of profit policy?

 

PART – B

Answer any FIVE questions                                                                                    (5×8=40 Marks)

 

  1. A second hand machinery was purchased on 1.1.2000 for Rs.30,000 and Rs.6,000 and Rs.4,000 were

spent on its repairs and erection respectively. On 1.7.2001, another machine was purchased for

Rs.26,000. On 1.7.2002, the first machine was sold for Rs.30,000. On the same day, one more machine

was bought for Rs.25,000. On 31.12.2002, the machine bought on 1.7.2001 was sold for Rs.23,000.

Accounts are closed on 31st December every year.

Depreciation is written off at 15% per annum on W.D.V. method, prepare machinery account for 3

years ending 31.12.02.

 

  1. From the following particulars, calculate total purchases:
              (Rs.)
Opening balance of B/P 25,000
Opening balance of creditors 30,000
Closing balance of B/P 35,000
Closing  balance of creditors 20,000
Cash paid to Creditors 1,51,000
B/P discharged during the year 44,500
Return outwards 6,000
Cash purchases           1,29,000

 

  1. 13. What is departmental Accounting? Distinguish between Department and Branch Accounting.

 

  1. 14. From the following details, set out the Hire Purchase Trading A/c in the books of a trader who sells a

number of articles of comparatively small value daily on the hire purchase system, showing his profit

on this department of the business for the year ended 31.12.88. For the purpose of charging his hire

purchase customers, he adds 60% to the cost of the goods.

    1.1.88 Rs.
      Stock in customers hands at selling price 31.12.88 1,620
      Sale of goods on hire purchase during the year at selling price 6,534
     Cash received from hire purchase customers at selling price 2,100
     Stock in customers’ hand at selling price 4,674
     Goods repossessed (Instalments due Rs.1,000) valued at 250

 

  1. 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  and (b ) 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

 

  1. A fire occurred in the premises of Winston on 15.3.2005 destroying his stock for which he maintained

no records. The following information was available from his books.

Year Sales (Rs.) Gross Profit (Rs.)
2001

2002

2003

2004

 5,00,000

8,00,000

9,00,000

8,00,000

       50,000

1,20,000

90,000

1,20,000

 

Value of stock on 1.1.2005                                         Rs.40,000

Purchases from 1.1.2005 to 15.3.2005                             75,000

Sales from 1.1.2005 to 15.3.2005                                    80,000

Stock salvaged                                                                   5,000

Calculate the amount to be claimed from the insurance company.

  1. From the following particulars, prepare Trading and Profit and Loss A/c for the year ending 31.3.2006

and Balance Sheet as on 31.3.2006.

              Trial Balance as on 31.3.2006

Particulars Dr. (Rs.) Cr. (Rs.)
Buildings 1,00,000
Capital 2,00,000
Sales (Cash) 1,50,000
Sales (Credit) 50,000
Salaries 10,000
Debtors 50,000
Opening stock 40,000
Wages 5,000
Purchases (Cash) 50,000
Purchases (Credit) 10,000
Cash in hand 5,000
Creditors 60,000
Discount received 1,000
Commission paid 2,000
Purchase Returns 1,000
Carriage inwards 3,000
Drawings 4,000
Sales returns 6,000
Bad debts 2,000
Carriage outwards 3,000
Advertisement 4,000
Rent paid 46,000
Electricity charges 2,000
Printing expenses 3,000
Interest paid 5,000
Rent received 38,000
Machinery 1,00,000
Furniture 50,000
5,00,000 5,00,000

 

  1. The directors of Departmental Stores Ltd. wish to ascertain approximately, the net profit of the A, B

and C departments separately for the quarter ended 31.3.88. It is found impracticable actually to take

stock on that date but an adequate system of departmental accounts is in use and the normal rates of

gross profit for the departments concerned are 40%, 30% and 20% on turnover respectively. Indirect

expenses are charged in proportion to departmental turnover.

Following are the figures for each department:

Particulars A B C
Rs. Rs. Rs.
Stock as on 1.1.88 30,000 35,000 15,000
Purchases to March 31, 1988 35,000 37,500 23,500
Sales to March 31, 1988 60,000 50,000 30,000
Direct expenses 10,100 7,250 3,550

Total indirect expenses for the period (including those relating to other departments) were Rs.21,000 on total sales of Rs.4,20,000.

Prepare accounts showing gross profit and net profit after making provision for stock at 10% of the closing stock in respect of each department.

 

 

PART – C

Answer any TWO questions                                                                                         (2×20=40 Marks)

[

  1. 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:

  1. Closing stock at the year end was Rs.30,000
  2. Further bad debts amounted to Rs.500
  3. 5% of the profit is to be appropriated for creating Reserve fund
  4. Create 5% provision for doubtful debts on debtors
  5. Create 2% provision for discount on debtors
  6. Create 1% reserve on creditors.

 

 

  1. A Company has two branches A and B. Goods are invoiced at cost plus 50%. Branch remits cash

received to the H.O. and all expenses are met by H.O. From the following particulars, prepare the

necessary accounts on the stock and debtors system, to show the profit earned at branches.

A B
Rs. Rs.
Stock on 1.1.85 (invoice price) 9,300 15,600
Debtors on 1.1.1985 6,800 8,700
Goods invoiced to the branch (at cost) 34,000 36,000
Sales at branches:
Cash Sales 25,010 35,000
Credit Sales 31,000 30,100
Cash collected from debtors 30,400 29,800
Goods returned by debtors 1,200 1,500
Goods returned by branch to H.O. 1,500
Goods transfer from B
  to A at invoice price 2,100 2,100
Shortage of Stock 450
Discount to customers 200 350
Expenses at branches 5,400 6,700
Surplus in stock 300

 

 

 

 

 

 

 

  1. Fire occured in the premises of Bad Luck Co. Ltd. on 1.11.1990. The indemnity period lasted for 4

months during which the sales of the company were reduced to Rs.2,00,000 only. The company closes

its account on 30th June every year. The Profit and Loss A/c for the year ended 30th June 1990 is given

below:

Dr.      Profit and Loss A/c for the year ending 30.6.1990      Cr.

 Particulars Rs. Particulars Rs.
To Opening Stock 5,00,000 By Sales 47,50,000
To Purchases 30,00,000 By Closing stock 2,50,000
To Variable expenses 7,87,500
To Standing charges 3,62,500
To Net Profit 3,50,000
50,00,000 50,00,000

The company took a loss of profit policy for a sum of Rs.6,00,000. The sales of the company for   the 12 months ending the date of fire were Rs.50,00,000 and for the months from 1.11.1989 to 28.2.1990 were Rs.15,00,000.

It was noted that the sales for the first four months of the year under indemnity were 20% higher than previous year. Compute the claim for loss of profit.

 

 

 

 

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