LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. & B.Sc. DEGREE EXAMINATION – COMMERCE, STATISTICS
|
SECOND SEMESTER – APRIL 2006
CO 2101 – FINANCIAL ACCOUNTING & FIN. STATE. ANALYSIS
Date & Time : 26-04-2006/1.00-4.00 P.M. Dept. No. Max. : 100 Marks
PART – A
Answer ALL the questions (10 x 2 = 20 marks)
- Name the parties interested in Accounting information.
- What is balance sheet?
- Distinguish between Gross Profit and Net Profit.
- What is Double Entry System?
- Fill in the blanks:
- Outstanding expenses is a current _________. (liability / Asset)
- Prepaid Expenses is a current ________. (liability / Asset)
- What is Trial balance?
- What is Capital expenditure?
- Give the rules for Debiting and Crediting.
- Compute payout Ratio & Retained Earnings Ratio:
Net Profit after tax Rs.5000; Preference dividend Rs.2000 No. of Equity Shares 3000; Dividend per share Rs.0.40.
- What is Earnings per share?
PART – B
Answer any FIVE questions: (5 x 8 = 40 marks)
- What is book-keeping? Explain the concepts of double entry system.
- Explain the advantages and limitations of Ratio Analysis.
- What is Bank Reconciliation statement? What are the reasons for the difference between the balance shown by the cash book and the one shown by the pass book?
- From the following Receipts and payments account, prepare an Income and Expenditure account as on 31-12-97.
| 1997 Jan 1 | Rs. | Rs. | |
| To balance b/d | 7,700 | By Charities | 10,500 |
| To Donations | 8,000 | By Salaries | 4,450 |
| To Subscriptions | 4,000 | By purchase of furniture | 750 |
| To Interest on investments | 9,500 | By Investments | 5,000 |
| To Sale of old furniture (Book value Rs.100) | 75 | By balance c/d | 8,575 |
| 29,275 | 29,275 |
One-half of donations is to be treated as income. Rs.450 were owing for salaries. Interest on investment Rs.500 had accrued but was not received.
- Prepare three column cash book from the following transactions for the month of January
Rs.
Jan1 Balance in hand 250
Balance at bank 3,500
- Received from customer a cheque
For Rs.500 and discount allowed 25
3 Sold goods for cash 150
4 Paid Ram by cheque 100
Discount Received 10
5 Salaries paid to staff 200
6 Withdrew from bank for office use 500
7 Purchased a typewriter by cheque 500
- From the following Prepare necessary subsidiary books:
August 1 Bought goods form Daru Rs.11,200
- Sold goods to David Rs.8,700
2 Bought goods from Batli Rs.11,350
- Sold good to peepawala Rs.1950
5 Returned goods to Batli Rs.880
- Peepawala Returned goods Rs.220
- Sold goods to Ahemdbai Rs.2,800
- Ahemdbai returned goods Rs.420
- Calculate a) Current Ratio b) Debt Equity Ratio c) Liquid Ratio d) Fixed Assets
Ratio
| Rs. | Rs. | ||
| 5,000 shares of Rs.50 each | 2,50,000 | Buildings | 5,50,000 |
| 1,000 8% Preference shares | 1,00,000 | Stock | 1,20,000 |
| 2000 9% Debentures | 2,00,000 | Debtors | 1,27,500 |
| Reserves | 1,50,000 | Prepaid Expenses | 2,500 |
| Creditors | 75,000 | ||
| Bank overdraft | 25,000 | ||
| 8,00,000 | 8,00,000 |
- Your are required to ascertain cash from operation for the following profit and loss a/c
| Rs. | Rs. | ||
| To Depreciation | 14,000 | By Gross Profit | 1,60,000 |
| To Salaries | 29,000 | By Profit on sale of investments | 600 |
| To loss on Sale of investment | 2,000 | ||
| To Rent & Rates | 8,000 | ||
| To Preliminary Expenses | 4,000 | ||
| To Provision for Tax | 20,000 | ||
| To Propored dividend | 10,000 | ||
| To Net Profit | 73,600 | ||
| 1,60,600 | 1,60,600 |
PART – C
Answer any TWO questions (2 x 20 = 40 marks)
- With the help of following Ratio, draw the balance sheet.
Current Ratio 2.5
Liquid Ratio 1.5
Net working capital Rs.300,000
Stock Turnover Ratio (on cost) 6 times
Cross Profit Ratio 20%
Debt collection period 2 months
Fixed assets Turnover Ratio (On cost) 2 times
Fixed assets to shareholders net worth 0.80
Reserves and surplus to capital 0.50
- From the following Trial Balance of Shri.Rajan, Prepare the Trading and Profit and Loss Account for the year ended 31-3-98.
| Dr. (Rs.) | Cr. (Rs.) | |
| Rajan’s Capital | 29,000 | |
| Drawings | 760 | |
| Purchase and sales | 8,900 | 15,000 |
| Sales and Purchase Returns | 280 | 450 |
| Stock on 1.4.97 | 1,200 | |
| wages | 800 | |
| Buildings | 22,000 | |
| Carriage on purchase | 2,000 | |
| Trade Expenses | 200 | |
| Advertisement | 240 | |
| Interest | 350 | |
| Taxes and Insurance | 130 | |
| Debtors and Creditors | 6,500 | 1,200 |
| Bills Receivable and payable | 1,500 | 700 |
| Cash at bank | 1,390 | |
| Salaries | 800 | |
| 46,700 | 46,700 |
Adjustments:
- Stock on 31st march 1988 was valued at Rs.1500
- Insurance was prepaid Rs.40
- Outstanding salaries Rs.200 and Taxes Rs.130
- Depreciate Building at 2% p.a.
- From the following Balance sheet, Prepare cash flow statement.
| 1992 | 1993 | 1992 | 1993 | ||
| Share Capital | 1,00,000 | 1,50,000 | Fixed assets | 1,00,000 | 1,50,000 |
| Profit & loss a/c | 50,000 | 80,000 | Good will | 50,000 | 40,000 |
| General Reserves | 30,000 | 40,000 | Stock | 30,000 | 80,000 |
| 6% Debentures | 50,000 | 60,000 | Debtors | 50,000 | 80,000 |
| Creditors | 3,00,000 | 40,000 | Bills Receivable | 30,000 | 20,000 |
| Outstanding Expenses | 1,000 | 15,000 | Bank | 10,000 | 1,50,000 |
| 3,85,000 | 2,70,000 | 3,85,000 | 2,70,000 |
Depreciation on fixed Assets of the year 1993 is Rs.20,000