Loyola College B.Com April 2008 Financial Accounting Question Paper PDF Download

October 20, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

RO 1

FIRST SEMESTER – APRIL 2008

CO 1500 – FINANCIAL ACCOUNTING

Date : 03-05-08 Dept. No. Max. : 100 Marks

Time : 9:00 – 12:00

PART – A

Answer ALL Questions (10 x 2 = 20 marks)

What is Trial balance?
Explain the term ‘Depreciation’.
Calculate the Sales: Cost of goods sold Rs. 1,00,000 & Rate of gross Profit on sale 20%?
What are Self-balancing ledgers?
Write a note on Stock and Debtors System.
What is the meaning of Departmental Accounts?
Calculate Cash price if Hire Purchase is Rs. 1,00,000 and Interest is Rs. 25,000.
Calculate Short working, if minimum Rent is Rs.5000 & Royalty Rs. 3000.
What is loss of profit insurance?
How is the loss of stock computed?

PART – B

Answer any FIVE Questions (5 x 8 = 40 marks)

Differentiate between Hire Purchase & Instalment System.
From the following details Calculate Capital in the beginning?

Rs.

Profit made during the year 2,400

Drawings 1,200

Capital at the end 8,000

Capital introduced during the year 2.000

‘A’ keeps General ledger. Prepare Debtors Ledger Adjustment a/c & Creditor Ledger Adjustments as they would appear in General Ledger from the following particulars.

Rs.

Jan.1 Creditors’ balance 40,000

Jan.1 Debtors’ balance 50,000

Transactions during the month of January were as under:

Rs. Rs.

Credit Sales 20,000 Discount

Received from Creditors 200

Sundry Charges debited to

Customers 300 Bills Receivable dishonoured 400

Cash received from customers18,000 Bills payable 3000

Discount allowed 200 Bills payable dishonoured 300

Bills Receivable received

from Debtors 10,000

Paid cash to creditors 25,000

Credit purchases 21,000

Purchase Returns 500

Sales Returns 200

Allowances from Creditors 100

Bad debts 1,000

Mr. R of Cochin has opened a branch at Chennai which sells goods for cash only. The following are the transactions between Branch Office and the Head office for the year ended 31.12.2007.

Rs. Rs.

Opening Stock 2,00,000 Cash Sent to Branch for Rent 2000

Goods supplied to Branch 5,00,000 Cash Sent to Branch for other

Expenses 1000

Cash received from Branch 6,00,000 Closing Stock 1,50,000

Petty Cash balance on 31.12.2007 100

Prepare Chennai Branch Account.

The following purchases were made by a business having three Departments:

Dept. X — 1000 units

Dept. Y — 2000 units

Dept. Z — 2400 units

Stock on 1^st Jan were

Dept. X — 120 units

Dept. Y — 80 units

Dept. Z — 152 units

The Sales were:

Dept. X — 1020 units @ Rs. 20 each

Dept. Y — 1920 units @ Rs. 22.50 each

Dept. Z — 2496 units @ Rs. 25 each

Prepare Department Trading Account.

On 1^st Jan 2004, ‘A’ bought a television from a seller under Hire purchase system, the cash price of which being Rs.10,450 as per the following terms.

3000 to be paid on signing the Agreement.
Balance to be paid on three equal installments of Rs. 3000 at the end of each year.
The rate of Interest charged by the seller is 10% p.a

Calculate Interest paid by the buyers to the seller each year.

A company leased a colliery on 1^st Jan 2004 at a Minimum Rent of Rs. 20,000 per year, merging into a royalty of Rs. 1.50 per ton with a power to recorp short workings over the first 3 years of the lease. The output of the colliery for the first four years:

2004→ 9000 tons 2006 → 16,000 tons

2005→12000 tons 2007→20,000 tons

Pass Journal entries.

Fire occurred in the premises on 1.1.2008 and the business books and records were saved. The following information was obtained.

Rs.

Purchases for the year ending 30.06.2007 60,000

Sales for the year ending 30.06.2007 90,000

Sales from 1.7.2007 to 31.12.2007 35,000

Purchase from 1.7.2007 to 31.12.2007 50,000

Stock on 30.06.2007 28,000

Stock on 30.06.2006 40,000

Calculate the amount of claim to be presented to the insurance company in respect of the loss by fire.

PART – C

Answer any TWO of the following Questions (2 x 20 = 40 marks)

Thomas does not maintain his books in the Double entry system and Bank Accounts. From the following information.

Prepare P/L a/c and Balance Sheet as at June 30, 2005

(A) Assets and Liabilities 30-06-2004 30-06-2005

Rs Rs

Stock 19,800 1,13,200

Creditors 31,000 14,500

Debtors 1,18,000 1,25,000

Premises 90,000 90,000

Furniture 11,000 11,500

Air-Conditioner 15,000 15,000

(B) Creditors as on 30-06-2004 includes Rs.15000 for purchase of Air-Conditioner.

Cash as at July 1, 2004 15,000

Collections form customers 1,60,800

Payments to Creditors (Trade) 1,44,000

Rent, Rates & Taxes 11, 000

Salaries 1,12,000

Sundry expenses 18,000

Sundry Income 16,500

Drawings by Thomas 30,000

Loan from Mrs. Fernandes 23,000

Capital introduced 12,000

Cash sales 11,500

Cash purchases 15,000

Paid to creditor for Air-Conditioner 15,000

(D) Bad debts written off 1,200

Crown Industries, Mumbai has a branch at Madurai to which goods are invoiced at cost plus 25%. The branch makes sales both for cash and on credit. Branch expenses are paid direct from head office and the branch remits all cash to head office.

From the following details, prepare the necessary ledger accounts in Head Office books to calculate branch profits as per the Stock and Debtors System.

Goods received from H.O at invoice price 60,000

Returns to H.O at invoice price 1,200

Branch stock on April 1, 2002 at invoice price 6,000

Cash sales 20,000

Credit sales 36,000

Branch debtors on April 1, 2002 7,200

Cash collected from debtors 32,000

Discount allowed to debtors 600

Bad debts in the year 400

Goods returned by debtors to branch 800

Rent, rate and taxes at branch 1,800

Branch office expenses 600

Branch stock at invoice prince on March 31, 2003 12,000

The M & Co. acquired 5 machines on Hire-purchase system from the V & Co. _____ the cash price for each machine being Rs. 5000. The price was payable in five(5) installments of Rs. 1100 each, every year, the first being paid on signing the contract and the installments included interest charged at 5% per annum. The M & Co decided to provide depreciation at 10% per annum calculated on the diminishing balance method. It paid the first installment due at the end of the first year but could not pay the next.

Give the necessary ledger Accounts in the books of both parties for two years if the V & Co agreed to leave 3 machines with the M & Co adjusting the value of the other 2 machines against the amount due. The machines were valued on the basis of 20% depreciation annually. The Hire vendor spent Rs. 400 on getting the machines thoroughly overhauled and sold them for Rs. 8,800.

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Loyola College B.Com Nov 2008 Financial Accounting Question Paper PDF Download

October 20, 2017 by 01 prakash

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

QB 01

B.Com. DEGREE EXAMINATION – COMMERCE

FIRST SEMESTER – November 2008

CO 1500 – FINANCIAL ACCOUNTING

Date : 12-11-08 Dept. No. Max. : 100 Marks

Time : 1:00 – 4:00

SECTION A

Answer ALL (10 x 2 = 20)

What are the limitations of single entry system.
State the advantages of departmental accounts.
State, with reasons in brief, whether the following statement is true or false : The provision for discount

on debtors is calculated after deducting the provision for doubtful debts from debtors.

What is an average clause in a insurence policy?
Distinguish between straight line and diminishing balance methods of depreciation.
Give journal entries for the following: (i) Goods used for personal consumption- 5,000;

(ii) Stock destroyed by fire-Rs. 50,000-covered fully by insurance.

Calculate cash price of the asset taking into consideration the following particulars: Down payment

Rs. 15,000; first, second and third instalments at the end of each year Rs. 25,000, Rs. 25,000, and

Rs. 15,000 respectively. Interest is reckoned at 10% p.a.

Find the amount of claim under average clause if a stock of Rs. 3,00,000 is insured for Rs. 2,00,000 and

the loss amounts to Rs. 1,50,000.

From the following particulars of Mr. Bhat, under single entry system, ascertain the total sales:

Opening stock Rs. 12,000, purchases Rs. 60,000, wages Rs. 7,000 closing stock Rs. 15,000, the rate of

gross profit on sales 20%.

Madras Traders opened a branch at Bangalore on 1.1.2006. From the following particulars prepare

branch account in the books of Head Office: Goods sent to branch Rs. 20,500, Cash sent to branch – for

salary Rs. 4,000; for rent Rs. 1,000, Goods returned by branch Rs. 2,000; Cash received from branch

during the year Rs. 20,000; stock on 31^st December 2006-Rs. 10,000.

SECTION B

Answer any FIVE only (5 x 8 = 40)

Explain the steps involved in arriving at the claim for loss of profits under consequential loss policy.
What do you understand by hire purchase? How does it differ from a purchase on instalment basis?
A firm has two departments-cloth and readymade clothes departments. The readymade clothes are

made by the firm itself out of the cloth supplied by the cloth department at its usual selling price. From

the following figures, prepare departmental trading and profit and loss account for the year ended 31^st

March, 2004.

Particulars Cloth Deptt. Readymade Clothes Deptt.

Opening Stock Rs. 2,40,000 Rs. 48,000

Purchases 18,00,000 24,000

Sales 20,00,000 6,00,000

Transfer to readymade clothes dept. 4,00,000 —

Manufacturing expenses — 68,000

Selling expenses 40,000 4,000

Closing stock 3,00,000 60,000

The stock in readymade clothes department may be considered as consisting 80% cloth and rest as

other expenses. The cloth department earned a gross profit of 25% in 2002-2003.

Show the relevant adjustment accounts in General Ledger under self-balancing Ledgers.

Rs.

Total balances of Trade Debtors as on 1^st January, 2007 18,700

Total balances of Trade Creditors as on 1^st January, 2007 23,560

Transaction during January 2001

Credit Sales 19,700

Cash received from Trade Debtors 9,800

Discount Allowed to Trade Debtors 200

Bills Receivable received from Trade Debtors 12,000

Bills Receivable received from Trade Debtors dishonoured 1,000

Credit Purchases 25,560

Cash paid to Trade Creditors 28,800

Discount received from Trade Creditors 1,200

Nila Ltd. which depreciates its machinery @ 10% per annum according to diminishing balance method,

had on 1^st April, 2006 Rs. 4,86,000 balance in its machinery account. During the year ended 31^st March,

2007, the machinery purchased on 1^st April, 2004for Rs. 60,000 was sold for Rs. 40,000 on 1^st October,

2006 and a new machinery costing Rs. 70,000 was purchased and installed on the same date; installation

charges being Rs. 5000.

The Company wants to change its method of depreciation from diminishing balance method to

straight line method w.e.f. 1^st April, 2004and adjust the difference before 31^st March, 2007, the rate of

depreciation remaining the same as before.

Show the machinery account for the year ended 31^st March, 2007.

The Sandur Iron Co. has taken on lease a mine on a royalty of 50 paise per tonne of iron ore raised

with a minimum rent of Rs. 20,000 per year, and power to recoup shorworkings during the first four

years was as under:

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

Quick Movers Ltd. acquires two Motor Vans each costing Rs. 18,650 from Karnatak Motors Ltd. on

hire purchase system. Payment to be made Rs. 10,000 down and the balance in three equal instalments

of Rs. 10,000 each at the end of each year. The interest charged is at 5% p.a. Depreciation to be

provided is at 10% p.a. on diminishing balance method.

Quick Movers Ltd. after having paid the advance and the first instalment at the end of first year, failed

to pay the second instalment because of financial difficulties. Karnatak Motors Ltd. took possession of

theVans and sold them for Rs. 21,998 after spending Rs. 400 on repairs.

Write up the necessary ledger accounts in the books of Quick Movers Ltd.

Due to heavy fire in the godown of a company on 1^st October, 2005, the entire stock was burnt except

some costing Rs. 35,000. The books were, however, saved.

From the information available it was found that:

The Company’s average gross profit was 25% on sales.
The stock on 31^st March, 2005 valued at 10% above cost was Rs. 1,10,000.
The purchases and sales from 1^st April 2005, upto the date of fire were

Rs. 1,50,000 and Rs. 3,40,000 respectively.

The wages for the period amounted to Rs. 72,000
The company insured the stock for Rs. 60,000
The policy had an average clause.

You are required to prepare a statement showing the amount of stock lost by fire and the amount

of claim to be lodged with the Insurance Company.

SECTION C

Answer any TWO only (2 x 20 = 40)

Following is the trial balance of Nathan & Co. as on 31^st March, 2007

Rs. Rs.

Capital Account 80,000

Drawing Account 6,000

Stock(1.4.2006) 45,000

Purchases 2,60,000

Sales 3,10,000

Furniture 10,000

Sundry Debtors 40,000

Freight and Octroi 4,600

Trade expenses 500

Salaries 5,500

Rent 2,400

Advertising expenses 5,000

Insurance Premium 400

Commission 1,300

Discount 200

Bad Debts 1,600

Provision for Bad Debts 900

Creditors 20,000

Cash in hand 5,200

Bank 5,800

Goodwill(at cost) 20,000____________________

_4,12,200 4,12,200__

Adjustments:

Stock on 31^st March, 2007 was valued at Rs. 53,000
Salaries paid have been only for 11 months
Unexpired insurance included in the figure of Rs. 400 appearing in trial balance is Rs. 100
Commission earned but not yet received amounting to Rs. 122 is to be recorded in books of account
Provision for bad debts is to be brought upto 3% of sundry debtors.
Manager is to be allowed a commission of 10% of net profits after charging such commission
Furniture is depreciated @ 10% per annum .
Only 1/4^th of advertising expenses are to be written off.

Prepare trading and profit and loss account for the year ended 31^st March, 2007and balance sheet as on that date

Southern Traders have opened a branch at Nagpur on 1.1.2000. The goods were sent by the head office

to the branch and invoiced at selling price to the branch which was 125% of the cost price of the head

office. The following are the particulars relating to transactions of Nagpur Branch.

Rs. Rs.

Goods sent to Branch(at cost) 2,80,800

Sales: Cash 1,25,000

Credit 1,75,000 3,00,000

Cash collected from debtors 1,56,000

Discount allowed 4,000

Stock on 31.12.2000

(at invoice price) 55,000

Cash sent to branch for:

Wages 3,000

Freight 11,000

Other expenses 6,000 20,000

Spoiled good written off(at invoice price) 500

Prepare the necessary accounts in the books of Head Office under Stock and Debtors System.

21.Shri Ramdas commenced business on 1 April, 2006 with a capital of Rs. 45,000 he immediately

purchased furniture of Rs. 24,000. During the year he borrowed from his father a sum of Rs. 5,000. He

had withdrawn Rs. 600 per month for his household expenses. He had no bank account and all dealings

were in cash. He did not maintain any books but following information is given:

Rs.

Sales(including cash sales of Rs. 30,000) 1,00,000

Purchases (including cash purchases of Rs. 10,000) 75,000

Carriage inwards 700

Wages 300

Discount allowed to debtors 1,200

Salaries 6,200

Bad debts written off 1,100

Trade expenses 1,200

Advertisements 2,200

He used goods worth Rs. 1,300 for his personal use and paid Rs. 500 to his son for

examination and college fees.

On 31^st March 2007, his debtors were worth Rs. 21,000 and creditors Rs. 15,000. Stock in trade was

valued at Rs. 10,000. Furniture to be depreciated by 10% p.a.

Prepare Trading and Profit & Loss Account and the Balance Sheet for the year

ended 31^st March 2007.

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