Loyola College B.Com April 2009 Financial Accounting Question Paper PDF Download

         LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

KP 01

FIRST SEMESTER – April 2009

CO 1500 – FINANCIAL ACCOUNTING

 

 

 

Date & Time: 20/04/2009 / 1:00 – 4:00  Dept. No.                                                            Max. : 100 Marks

 

 

                                                                  SECTION – A

Answer ALL questions:                                                                                  10 x 2 = 20     

  1. Choose the correct answer:

Income Tax paid by a sole trader is shown:

  • On the debit side of Trading Account
  • On the debit side of Profit & Loss Account
  • By way of deduction from the capital in the balance sheet.
  1. Fill in the blanks:

The difference between cash sent accounts appearing in the two trial balances i.e. branch trial balance and head office trail balance is called _______________.

  1. Royalty account is in the nature of ___________________ account.
  2. True of False

If the goods are transferred form department X to department Y at selling price which includes a profit of 25% on the cost, the amount of stock reserve on such closing stock(Valued at Rs.60,000) of department Y will be Rs. 15,000.

  1. Ascertain purchases from the following figures:
Cost of goods sold Rs. 80,700
Opening stock 5,800
Closing stock 6,000
  1. Mahendra and Narendra purchased two assets, particulars of which are given as under:
Cost Scrap value Estimated life
Furniture Rs. 73,200 Rs. 480 6 years
Plant Rs. 1,52,800 3,280 8 years

You are required to determine the amount of depreciation to be written off in each case. Assume the company has adopted straight-line method of depreciation.

  1. Calculate the missing figure:
Capital in the beginning? Capital at the end Rs. 1,82,000
Capital introduced Rs. 47,000 Drawings Rs. 28,000
Loss Rs. 14,000
  1. Calculate bills received from customers:
Opening balance of bills Rs. 7,000 Bills received endorsed to creditors Rs. 1000
Bills dishonoured by customers Rs. 2,000 Bills collected Rs. 13,000
Closing balance of bills Rs. 6,000
  1. Calculate cash price of Machine from the following information:
Down payment Rs. 10,000 Rate of Interest 5% p.a
4 annual Instalments at the end of each year Rs. 10,000
  1. Stock of Rs. 80,000 of M/S Kailash chand & sons has been insured for Rs. 70,000. Loss due to fire is assessed at Rs. 20,000. Calculate what claim M/s Kailash Chand & Sons will get from the Insurance company.

SECTION – B

Answer any FIVE questions:                                                             5 x 8 = 40

  1. What causes depreciation? Discuss them.
  2. Distinguish between hire-purchase and Instalment-purchase system.
  3. Explain in brief the procedure of calculation of total stock and claim for stock lost on the date of fire.
  4. Naresh commenced business in March 2000. He acquired some machines for Rs. 2,00,000 on April 1, 2000. He acquired another machine for Rs. 50,000 on March 1, 2002. He sold Machines, original cost of which was Rs. 60,000 for Rs. 35,000 on October 31, 2001. Assuming depreciation @ 15% under written down value basis, compute the depreciation for the year ended March 31, 2001 and March 31, 2002. Depreciation to be calculated to the nearst rupee.
  5. The following details were extracted from the books of a company for six months ended 31st March, 2003.

2002 Oct 1 Total balances of accounts of                   2002 Oct 1 Provision for

customers Rs. 3,72,000                                                          doubtful debts Rs. 25,000

The transactions for six months ended 31st March, 2003:

Credit Sales Rs. 7,30,000 Returns from customers Rs. 7,400
Cash received by customers Rs. 7,08,000 Cheques dishonoured Rs. 2,800
Bills accepted by customers Rs. 26,000 Bills dishonoured Rs. 3,600
Bills endorsed Rs. 7,000 Bad debts written off Rs. 6,300
Carriage charged to customers Rs. 1,200 Cash paid to customers for returns 5,000
Cash discount allowed Rs. 17,800 Bad debts previously written off recovered 1,200
Transfer from bought Rs. 3,000

Prepare sales ledger adjustment account in general ledger.

  1. The super cycles has a branch at Chennai. Goods are invoiced to the branch at cost plus 25%. Branch is instructed to deposit cash every day in the head office account in the bank. All expenses are paid by cheque by the head office except petty cash expenses which are paid by the Branch manager. From the following particulars, prepare branch account in the books of head office:
Stock on 1st January 2002 Rs. 2,500 Stock on 31st December 2002 Rs. 3,000
Sundry debtors on 1st January 2002 Rs. 1,400 Sundry debtors on 31st December 2002 Rs. 1,800
Cash sales for the year Rs. 10,800 Credit sales for the year Rs. 7,000
Cash remitted to the head office Rs. 15,000 Furniture purchased by the Br. Manager Rs. 1,200
Goods invoiced from the head office Rs. 18,200 Expenses paid by head office Rs. 1,640
Expenses paid by the Branch Rs. 120 Cash remitted by H.O to the Branch for purchase of safe Rs. 1,300
  1. A company leased a mine of 1st January, 1999 at a minimum rent of Rs. 20,000 merging into a royalty of Rs. 1.50 per ton with power to recoup shortworkings over the first three years of the lease. The output of the mine for the first three years was 9000 tons, 12000 tons, and 16000 tons respectively.

Pass the necessary journal entries for each of the three years in the books of the company.

  1. Fire occured in the premises of Mr. Srinivasan on May 1, 2003 and the stock was destroyed. Following information was available from the records:
Purchases for the year 2002 Rs. 8,88,000 Sales for the year 2002 Rs. 11,60,000
Purchases form Jan 1, 2003 to May 1, 2003  

Rs. 1,82,000

Sales from Jan 1, 2003 to May 1, 2003 Rs. 2,40,000
Stock on January 1, 2002 Rs. 1,44,000 Stock on December 31, 2002 Rs. 2,42,000
Wages paid during 2002 Rs. 1,00,000 Wages paid during Jan 1, 2003 to May 1, 2003 Rs. 18,000

The stock salvaged was Rs. 25,000. A fire insurance policy for Rs.2,00,000 was taken to cover the loss by fire.

There was a practice in the concern to value the stock at cost less 10%. But this practice was changed and stock on December 31, 2002 was valued at cost plus 10%.

Calculate the amount of claim to be submitted with the Insurance Company for stock lost by fire.

SECTION – C

Answer any TWO questions:                                                             2 x 20 = 40

  1. Komco Ltd carries on its business through five departments A,B,C,D and E. The following information for 2002 is made available:
  • Salaries Rs. 11,020; Rent Rs.5,800; Insurance Rs.1,160; Miscellaneous Expenses Rs. 2,610 All these expenses are chargeable to each department in proportion to the cost of articles sold in respective department.
  • The following balances as at 31.12.2002 were ascertained.
            Particulars A B C D E
Rs. Rs. Rs. Rs. Rs.
Opening stock at cost 10,000 6,000 15,000 8,000 9,000
Purchases 1,00,000 60,000 20,000 52,000 60,000
Sales 96,000 62,000 19,000 46,000 60,000
Closing Stock 23,000 8,000 6,000 2,000 11,000

Prepare the profit & loss account to show the result of each department and also the combined

results with respective % on sales.

  1. Thiru Thomas does not maintain his books in the Double Entry System. From the following information, prepare Trading, Profit & Loss A/C and Balance Sheet as at March 31, 2003:

(i)

Assests and liablilities 31.3.2002 31.3.2003
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

(ii)  Creditors as at 31.3.2002 include Rs. 15,000 for purchase of Air-Conditioner.

(iii)

Cash transactions: Rs.
Cash as at April 1, 2002 15,000
Collections from customers 1,60,800
Payments to creditors (Trade) 1,44,000
Rent, rates and taxes 11,500
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
Payment to creditor for Air-conditioner 15,000

(iv) Bad debts written off                                1,200

  1. X purchased five trucks on hire purchase basis on October 1, 2001. The cash price of each truch was Rs. 5,50,000. X was to pay 20% of the cash price at the time of delivery and 25% of the cash price at the end of each of the four subsequent half years beginning from March 31, 2002.

On X’s failure to pay the instalment due on September 30, 2002, it was agreed that X could keep three trucks on the condition that the value of the two trucks would be adjusted against the amount due, the trucks being valued at cost less 25% depreciation.

Show the relevant accounts in the books of X, assuming that the books of account are

closed every year on March 31, and depreciation @ 15% is charged on the original cost of the trucks.

 

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