LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FIRST SEMESTER – APRIL 2012

CO 1500 – FINANCIAL ACCOUNTING

 

 

 

Date : 28-04-2012              Dept. No.                                        Max. : 100 Marks

Time : 1:00 – 4:00

 

PART – A

Answer ALL the questions:                                                                                     (10×2=20 Marks)

 

1. What do you understand by “Self – Balancing System of Ledger”?
2. State any four objectives of preparing departmental accounts.
3. What is minimum rent?
4. Under stock and debtor system, cost of shortage is debited to
5. a) Branch adjustment a/c    b) Branch stock a/c
6. c) Branch profit & loss a/c d) Goods sent top branch a/c
7. Hire purchaser is in the position of a ———— with regard to goods obtained on hire purchase
8. a) Creditor     b) Debtor    c) Bailor         d) Bailee
9. Salary paid to manager must be debited to:
10. a) Manager’s A/c b) Office expenses A/c c) Salaries A/c             d) Trading A/c
11. A firm purchased a plant for Rs.60,000. Erection charges Rs.5,000. Effective life of the plant is 13 years. Calculate the amount of depreciation per year under Straight Line Method.
12. A fire occurred in a firm on 10^th Value of stock on that date was Rs.80,000, but it was insured for only Rs.56,000. Stock destroyed by fire was Rs.50,000. Find the claim.
13. A purchased a machine on hire-purchase basis. The cash price of the machine was Rs.22,350. As per the terms, the buyer had to pay Rs.6,000 on signing the agreement and the balance in three annual instalments of Rs.6,000 each. Vendor charges interest at 5% p.a. Calculate the interest amount for the first instalment.
14. Calculate debtors’ balance at the end:

Opening debtors Rs.40,000

Total sales Rs.1,60,000

Cash sales Rs.20,000

Cash received from customers Rs.60,000

Bad debts Rs.4,000

Returns inward Rs.1,000

Bills received from customers Rs.18,000.

 

PART – B

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

 

11. Distinguish between a Trail Balance and a Balance Sheet.
12. State the advantages of “Self – Balancing System of Ledger.
13. Give the differences between hire purchase and instalment purchase system.
14. On 1st April 2001, Kumar purchased a secondhand machine for Rs.80,000 and spent Rs.20,000 on its

cartage, repairs and installation. The residual value at the end of its expected useful life of 4 years is

estimated at Rs.40,000. On 30th September 2003, this machine is sold for Rs.50,000. Depreciation is

to be provided according to straight line method. The Books are closed on 31^st December every year.

Prepare Machinery Account.

 

 

15. From the following particulars, calculate credit sales and credit purchases.

	(Rs.)
Debtors as at 31.3.2002	28,000
Debtors as at 31.3.2001	24,000
Sales returns	1,000
Cash received from Debtors	74,800
Bills receivable drawn	26,000
Discount allowed	1,000
Bad debts	1,000
Cheques received from debtors	10,000
Bills receivable dishonoured	4,000
Cheque dishonoured	6,000

 

	(Rs.)
Balance of creditors on 31.3.2001	5,000
Returns outwards	3,000
Cash paid to creditors	25,000
Discount allowed by creditors	1,000
Bills accepted	5,000
Balance of creditors on 31.3.2002	10,000

 

16. Trading and Profit and Loss A/c of Janaki Radio and Gramophone Equipment Co. for the six months

ended 31.3.1993 is presented to you in the following form:

Particulars	Rs.	Particulars	Rs.
Purchases		Sales
Radio (A)	1,40,700	Radio (A)	1,50,000
Gramophones (B)	90,600	Gramophones (B)	1,00,000
Spare parts ( C)	64,400	Spare parts ( C)	25,000
Salaries & wages	48,000	Stock as on 31.3.93
Rent	10,800	Radio (A)	60,100
Sundry expenses	11,000	Gramophones (B)	20,300
Profit	34,500	Spare parts ( C)	44,600
	4,00,000		4,00,000

 

Prepare departmental accounts for each of the three departments A, B and C mentioned above

after taking into account the following:

1. i) Radios and Gramophones are sold at the show room and spare parts at workshop.
2. ii) Salaries and wages comprise as follows: Show rooms ¾ and workshop ¼.

It was decided to allocate the show room salaries and wages in the ratio of 1:2 between the

departments A and B.

iii) The work shop rent is Rs.500 per month. The rent of show room is to be divided equally

between the departments A & B.

1. iv) Sundry expenses are to be allocated on the basis of the turnover of each department.

 

17. X purchased a type writer on hire – purchase system. As per terms, he is required to pay Rs. 800

down, Rs. 400 at the end of the first year Rs. 300 at the end of the second year and Rs. 700 at the end

of the third year. Interest is charged at 5% p.a.  Calculate the total cash price of the typewriter and the

amount of interest payable on each installment.

 

 

 

 

 

 

18. A fire occurred in the premises of Mr. Bean on 5.9.2002. All stocks were destroyed except to the

extent of Rs.5,000. From the following figures, ascertain the loss of stock suffered by him.

	Rs.
Stock on 1.1.2001	30,000
Purchases during 2001	1,50,000
Sales during 2001	2,00,000
Stock on 31.12.2001	40,000
Purchases during 2002 upto the date of fire	1,40,000
Sales during 2002 upto the date of fire	1,70,000

 

 

PART – C

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

 

19. 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.

 

20. Madras Ltd., invoices goods to its branch at cost plus 331/3%. From the following particulars prepare

the Branch Stock Account the Branch Stock Adjustment Account and Branch Profit & Loss Account

as they would appear in the books of Head Office:

	Rs.
Stock at Commencement at Branch at invoice price	1,50,000
Stock at Close at Branch at invoice price	1,20,000
Goods sent to branch during the year at invoice price
(including goods invoiced at Rs. 20,000 to branch on
31.3.95 but not received by branch before close of the Year)	10,00,000
Return of goods to Head Office (invoice price)	50,000
Cash sales at Branch	9,00,000
Credit Sales at Branch	50,000
Invoice value of goods pilfered	10,000
Normal loss at Branch due to shortage and deterioration
of stock ( at invoice price)	15,000
Madras Ltd. closes its books on 31st March, 1995
Goods lost in transit	10,000
Claim from insurance Co.	8,000

 

21. 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, (b) Short working A/c and (c) 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.

 

 

 

 

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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FIRST SEMESTER – NOVEMBER 2012

CO 1500 – FINANCIAL ACCOUNTING

 

Date : 08/11/2012               Dept. No.                                          Max. : 100 Marks

Time : 1:00 – 4:00

PART – A

Answer ALL questions:                                                                                                                   (10 X 2 = 20 MARKS)

1. How do you arrive at Gross profit?
2. What is single Entry System?
3. Explain the term “Depreciation”
4. Choose the correct alternative:

The loss on sale of old motor car is debited to

1. Profit & loss Account
2. Motor car Account
3. Depreciation Account
4. None of the above
5. Indicate if the following statement is true or false:

Net profit is equal to capital at the end + Drawings + Fresh capital introduced – capital in the beginning.

6. In Departmental Accounts, Rent and Rates are allotted to different departments on the basis of

—————————————.

7. Calculate the capital at the beginning of the year:

Rs

Capital at the end of the year                                              70,000

Drawings during the year                                                      10,000

Capital introduced during the year                                      5,000

Profit during the year                                                              20,000

 

8. From the following particulars, calculate closing branch debtors balance:

Rs

Branch Debtor (1-1-08)                                                       6,300

Credit Sales                                                                                 39,000

Cash received from debtors                                                  41,200

9. Calculate insurance claim from the following facts assuming that the insurers met their liability under the policy on ‘average basis’. A trader’s stock valued at Rs. 20,000 was totally destroyed. The stock in the godown was insured for Rs. 15,000 subject to average clause. The balance of stock, left after fire, appeared in the books at Rs. 12,000.

 

10. On 01.01.2005, x bought some trucks under hire – Purchase System for Rs. 51,000 payable by three equal installments combining principal and interest, the latter being a normal rate of 5% P.a. Calculate the cash price. (The present value of an annuity of one rupee for three years at 5% is Rs. 2.72325).

PART- B

Answer any FIVE questions:                                                                                                       (5X8=40 MARKS)

11. What are the features of Dependent Branches?
12. What is average clause? How do you compute claim for loss of stock when there is average clause in the contract?
13. How profit or loss is ascertained under the net worth method in single Entry System?
14. A manufacturing concern, whose books are closed on 31^st December every year, purchased machinery for Rs 50,000 on 1.1.2000 Additional machinery was acquired for Rs. 10,000 on 1.7.2001 and for Rs. 16,061 on 1.1.2004. Certain machinery purchased for Rs. 10,000 on 1.1.2000 was sold for Rs. 5,000 on 30.6.2003.

Give the machinery account for 5 years writing off depreciation at 10% p.a on written down value.

15. The following particulars have been extracted from the books of Mr.A. you are required to prepare the sales ledger Adjustment Account as June 30,2004.

Rs

Balance as on January 1,2004                                                                                                55,842

Credit Sales                                                                                                                                  98,602

Cash Sales                                                                                                                                     53,250

Cash received from Debtors                                                                                                 88,753

Discount allowed                                                                                                                            480

Bills accepted                                                                                                                                7,120

Returns Inwards                                                                                                                          5,430

Bills Receivable Dishonored                                                                                                    1,120

Bad debts written off                                                                                                                3,890

Amount received against bad debts written off last year                                                             175

Sundry charges debited to customers                                                                                 378

Transfers to Bought ledger                                                                                                      100

16. A fire occurred in the godown of a company on 20^th March, 2005. All stocks were destroyed except to the extent of Rs. 13,000. From the following figures ascertain the claim amount in respect of loss of stock by fire:

Rs

Stock on 01.01.04                                                                                                       40,000

Purchases during 2004                                                                                          1,40,000

Sales during 2004                                                                                                    2,00,000

Stock on 31.12.04                                                                                                       24,000

Purchases during 2005 up to the date of fire                                               1,46,000

Sales during 2005 up to the date of fire                                                         1,60,000

Stock was always valued at 80% of the cost.

17. Behavar coal company has taken a mine on lease. Royalty has been fixed at Rs. 0.50 per tonne. Minimum Rent is Rs 30,000. The right to recoup royalty is 5 years. The details of production for the first three years are as follows:

Year	Quantity Produced (Tones)
I   II   III	15,000   50,000   75,000

Prepare minimum rent account, Royalty account and Short workings Account.

18. G Purchased machinery under hire purchase arrangements from Mr. B. The cash price of the machinery was Rs 15,500 Payment for the purchase is to be made as under:

On signing the agreement Rs 3,000; First years end Rs 5,000; second year end Rs 5,000; Third year end Rs 5,000. Depreciation is charged at 10% on diminishing balance method. Show the asset account and the hive vendor account in the books of the Purchases.

PART – C

Answer any TWO Questions:                                                                                                     (2X20=40 MARKS)

19. The following Trial Balance of Mr. Arumugam as at December 31,2004 is given to you:

 

Debit Balances	Rs	Credit Balances	Rs
Stock on 1.1.04 Furniture Cycle Lorry Sundry Debtors Cash in hand Cash at Bank Purchases Bad debts Returns Inwards Salaries Wages Rent Discount allowed Commission Postage	36,000 2,000 600 60,000 32,000 1,200 4,800 1,80,000 1,000 10,000 16,000 22,000 7,200 1,800 1,400 800	Sundry Creditors Loan Capital Sales Returns outwards Discount earned Bills payable	30,000 14,000 50,000 2,60,000 4,000 2,200 16,600
	3,76,800		3,76,800

 

Taking into account the following adjustments, prepare Trading and profit and loss account and Balance sheet as on that date:

• Depreciate Furniture at 10% ; Cycle at 5% ; Lorry at 20%
• Create a Reserve of 5% on sundry debtors for bad and doubtful debts and 1% reserve for discount on sundry creditors
• Outstanding salaries Rs 3,000.
• Closing stock was valued at Rs 48,000,
• Provide for 5% interest on capital.

 

20. A Trader keeps his books under single entry system. From the following details, prepare trading and profit & loss A/C and Balance sheet:

 

	As on 01.01.05 Rs	As on 31.12.05 Rs
Creditors Furniture Cash Debtors Stock	37,500 2,500 6,250 62,500 25,000	43,750 2,500 10,000 87,500 12,500

 

Other details:

Drawings Rs 10,000 ; Bad debts Rs 1,250 ; Discount received Rs 3,750 ; Discount allowed Rs 2,500 ; sundry expenses Rs7,500 ; payment to creditors Rs 1,12,500 ; collections from debtors Rs 1,33,750 ; Sales Returns Rs 3,750 ; Purchase Returns Rs 1,250 ; charge 5% Depreciation on furniture.

21. A head office invoices goods to its branch at cost plus 50% Branch remits all cash received to the head office and all expenses are met by the Head office.  From the following particulars, prepare the necessary accounts on the stock and debtors system to show the profit or loss at the branch.

	Rs.		Rs.
Stock on 1.1.05 (invoice Price)	27,900	Shortage of stock	1,350
Debtors on 1.1.05	20,400	Discount allowed	600
Goods invoiced to branch (invoice price)	1,53,000	Expenses at the Branch	16,200
Cash Sales	75,000	Bad debts	600
Credit Sales	93,000
Cash collected for Debtors	91,200
Good returned by Debtors	3,600
Good returned to Head office by branch	4,500

 

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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

FIRST SEMESTER – NOVEMBER 2012

CO 1502 – FINANCIAL ACCOUNTING

 

 

Date : 08/11/2012             Dept. No.                                        Max. : 100 Marks

Time : 1:00 – 4:00

 

PART – A

 

ANSWER ALL THE QUESTIONS:                                                                            (10×2=20)

 

1. What are the different types of branches?
2. [a] Hire Vendor may take away only a portion of goods on which there is default of

installment___________

[b] ________________is the advance payable by the buyer while signing hire purchase agreement.

1. Say True or False:

[a] Single entry is an incomplete system of accounting because here only personal accounts are

maintained.

[b] Depreciable assets are expected to be used for an accounting period.

1. Match the following:

[a] Fixed assets          –      Mines, quarries

[b] Nominal assets    –      Bills Receivable

[c] Liquid assets         –      Building

[d] Wasting asset      –       Discount on shares.

1. What is the need for Departmental Accounting?
2. From the following data calculate Capital at the beginning of the year.

Capital at the end of the year             –   Rs.70,000

Drawings during the year                    –   Rs.10,000

Capital introduced during the year   –   Rs.5,000

Profit made during the year               –   Rs.20,000

1. In what basis the following expenses apportioned in departmental accounting?

[a] Selling expenses                [b] Canteen expenses

[c] Depreciation                       [d] Carriage inwards

1. Cash Price of the Machinery Rs.20,000. Down payment Rs.5,000, four annual installments of Rs.5,000 each. Calculate interest for each of the four years.
2. Why do you prepare a Statement of Affairs ?
3. Why do you prepare a Trading account?

 

PART – B

Answer any FIVE questions:                                                                                   (5 x 8 = 40 marks)

11. State the various methods of depreciation.
12. Distinguish between Statement of Affairs and Balance Sheet.

 

13. Define HRA. Enumerate the advantages of HRA.

 

14. On 01.01.2002, X purchased a machine for Rs.50,000. On 01.07.2003 additions were made for

Rs.10,000. On 01.04.2004, Rs.6,400 worth of additions were made. On 31.12.2004, 1/4^th of the first

machine purchased on 01.01.2002 was sold for Rs.7,000. Show machinery account from 2002 to 2004

in the books of X under diminishing balance method at 10% per annum.

 

15. From the following details, prepare Departmental Account:

Particulars	Department A Rs.	Department B Rs.
Opening stock Total Purchases Total sales Closing stock Credit purchases Credit sales	9,000 27,000 42,000 10,800 17,000 5,000	8,400 21,600 36,000 4,800 10,600 6,000

 

Transfer of goods from Departments A to B  Rs.4,000

 

Transfer of services from Departments B to A Rs.500

 

16. The Calcutta Commercial Company invoiced goods to its Jamshedpur Branch at cost. The Head

Office paid all the expenses from its bank except petty cash expenses which were paid by the branch.

From the following details relating to the Branch, prepare,

1) Branch stock A/c       2) Branch Debtors A/c   3) Branch Expenses A/c   4) Branch P&L A/c

 

	Rs		Rs
Stock ( Opening ) Debtors ( Opening ) Petty cash ( Opening ) Goods sent from HO Goods returned to HO Cash sales Advertisement Cash received from Debtors Stock ( Closing ) Allowance to customers	21,000 37,800 600 78,000 3,000 52,500 2,400 85,500 19,500 600	Discount to customers Bad debts Goods returned to branch by customers Salaries & Wages Rent & Rates Debtors(Closing) Petty cash ( Closing ) Credit sales	4,200 1,800 1,500   18,600 3,600 29,400 300 85,200

 

 

 

 

 

 

 

 

17. From the following information calculate credit purchases and total purchases:

	Rs.
Cash purchases Opening balance of bills payable Opening balance of creditors Closing balance of Bills payable Closing balance of creditors Cash paid to creditors Cash paid to bills payable in the relevant year Purchase returns Allowance from creditors Bills payable dishonoured	29,000 7,500 20,000 2,500 18,000 25,000 10,500 1,500 800 300

 

18. From the following information you are required to ascertain

[a] cost of sales    [b] Closing inventory as per CPP method,

when the firm follows LIFO method for inventory valuation.

Inventory on  1/4/1996                                  Rs.1,20,000

Purchases during   1996 – 97                         Rs.72,000

Inventory on  31/3/1997                                Rs.1,80,000

The firm has decided to adopt retail price index which was as follows:

On 1/4/1996 = 100;   on 31/3/1997 = 140;     Average during 1996 – 97 =125

 

PART – C

 

Answer any TWO questions:                                                                                   (2 x 20 = 40 marks)

 

19. Raja maintains his books under Single Entry system . From the following information prepare Trading

Profit and Loss A/c for the year ending 31.12.1991 and also Balance sheet as on that date.

Cash in hand on 01.01.1991 was Rs.4,250.

Asset and Liabilities

1.1.1991        31.12.1991

Debtors                                                                  16,300            21,250

Stock                                                                        8,330             11,220

Furniture                                                                     850                  850

Creditors                                                                  5,100               3,780

 

Other transactions:

Cash received from debtors       52,680              Cash sales                            1,275

Cash paid to creditors                37,400              Cash Purchases                   4,250

Salaries                                       10,200               Discount received                  595

Rent & Rates                               1,275                Discount allowed                  255

Other expenses                            1,530               Returns inward                      850

Drawings                                     2,550                Returns outward                   680

Additional capital                        1,700               Bad debts                               170

Adjustments:

 

Write off depreciation @5% on furniture.  Provide doubtful debts @ 1%  on debtors.

 

20. Kevin purchased a truck for Rs.1,60,000 from Pranesh on 1.1.93 payment to be made Rs.40,000

down,Rs.46,000 at the end of first year, Rs.44,000 at the end of second year and Rs.42,000 at the end

of third year. Interest was charged at 5% and Kevin depreciates the truck at 10% per annum on written

down method.

Kevin, after having paid down payment and first installment at the end of first year, could not pay

second installment. The seller took possession of the truck and after spending Rs.4,000 on repairs of

the asset, sold it away for Rs.91,500.

Give journal entries and ledger accounts in the books of both parties.

 

21. From the following trial balance as on 31.12.2000 prepare Trading, Profit and Loss Account and a

Balance Sheet as on that date.

 

Particulars	Debit  Rs.	Credit Rs.
Stock as on 01.01.2000 Cash in hand Drawings Rent Machinery Tax Provision for bad debts Bad debts Capital Interest General Expenses Bank overdraft Purchases Debtors Sales Creditors Sales return Purchase return	5,840 192 2,840 480 3,800 600   888     1,760   41,448 16,800     840	420   17,000 320   960     47,624 8,000   1,164
	75,488	75,488

 

Adjustments:

 

1. Depreciation on machinery 10% p.a
2. Rent outstanding Rs.500
3. Tax prepaid Rs.100
4. Provision for bad debts is to be increased to 5% on debtors
5. Closing stock Rs.3,500.
6. Discuss the Social Responsibility Accounting in detail.

 

 

 

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