LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Sc.,B.A. DEGREE EXAMINATION –MATHS.,CHEM.,ECONOMICS

TH 62

FOURTH SEMESTER – APRIL 2007

CO 4201 – FIN. ACCOUNTS & FIN. STAT. ANALYSIS

Date & Time: 19/04/2007 / 9:00 – 12:00 Dept. No. Max. : 100 Marks

Section – A

Answer all Questions . 10×2=20

What is double entry system of book – keeping ?
State the rules for debiting and crediting.
What is convention of conservatism ?
What is Trial balance ?
What is Earnings per share ?
Distinguish between capital expenditure and revenue expenditure ?
Why is Bank Reconciliation prepared ?
Compute the amount that should be debited to Income and Expenditure a/c.

Stock of balls and bats as on 1.1.04 Rs.2000

Purchase of balls and bats during 04 Rs.7500

Stock of balls and bats as on 31.12.04 Rs.3600.

Give a proforma of P/L Appropriation a/c.

10.Calculate Net profit and Gross profit Ratio. Sales Rs. 5,00,000 ; Gross profit

Rs.1,50,000. Net profit before tax Rs.1,00,000 ; Tax rate is 40 %.

Section – B

Answer any five Questions (5×8=40)

Distinguish between Receipt and Payment account and Income and Expenditure

account.

Explain the advantages and limitations of cash flow analysis.
Explain the fundamental concepts of double entry system.
Enter the following transactions in the proper subsidiary books:

Bought from Rathi Coal Co. 100 tones of steam coal @ Rs.577.50 per tonne.

Bought from Bishamber Dayal.

200 tones of soft coke @ Rs 465.00 per tonne.Less 5 % Trade Discount.

Bought from Central Coal Co.

200 tonnes of hard coke @ Rs.522.50 per tonne.Less 5 % Trade Discount.

Sold to Tea House.

10 tonnes of soft coke @ Rs.500.00 per tonne.Less 2.5 Trade Discount.

Sold to Widsons Industries.

400 tonnes of coal at an average price of Rs.532.50 per tonne.Less 5% Trade

Discount.

Write the following transactions in a Three – Column Cash Book and bring down

the balances.

2001 Rs

Dec. 1 Cash in hand 200

Cash at bank 1,800

4 Received cash from Sri Ram 95

Allowed him discount 5

6 Purchased stationery for cash 20

7 Paid to Sri.Shyam by cheques 330

Received discount 10

12 Rahim settled his account for less 5% discount by cheque 500

18 Paid sundry expenses in cash 30

23 Paid to Sri Jadu in cash 190

Received discount 10

24 Withdrew from bank for office cash 100

The comparative Balance Sheet of M/s.Ram brothers for the two years were as

follows :

—————————————————————————————————-

Liabilities 1984 1985 Assets 1984 1985

Rs. Rs. Rs. Rs.

Capital 1,50,000 1,75,000 Land & Buil. 1,10,000 1,50,000

Loan from Bank 1,60,000 1,00,000 Machinery 2,00,000 1,40,000

Creditors 90,000 1,00,000 Stock 50,000 45,000

Bills payable 50,000 40,000 Debtors 70,000 80,000

Loan from S.B.I __ 25,000 Cash 20,000 25,000

————————- ————————– 4,50,000 4,40,000 4,50,000 4,40,000

————————– ————————-

Additional Information :

Net profit for the year 1985 amounted to Rs .60,000.
During the year a machine whose book value 15,000 was sold for Rs.13,000.

You are required to prepare a cash flow statement.

From the following particulars of a trade , prepare a Bank Reconciliation Statement as on 30^th April , 2001 :
- Bank overdraft as per Cash Book Rs. 7,050.
- During the month , of cheques deposited into bank , one cheques for Rs.1,860 has not been collected.
- cheques issued for Rs.7,150 has not yet encashed .
- As per instruction, the bank had paid out 1,750 to a creditor , but the same has not yet been entered in the cash book.
- a debtor had deposited directly into the bank Rs.1,500 but the same has not been recoded in the Cash Book.
- the bank without any intimation had debited his account for Rs.20 as bank charges and credited the same for Rs.30 as interest .

Following is the Balance Sheet of Y Ltd.

Rs Rs

Eqty,share capital 1,00,000 Cash at bank 12,000

6% Pref.share capital 1,00,000 Bills Receivable 50,000

Debentures 60,000 Debtors 70,000

Reserves 1,50,000 Stock 40,000

Creditors 67,000 Furniture 1,30,000

Bank Over Draft 40,000 Buildings 2,20,000

Proposed Dividend 30,000 Goodwill 45,000

Profit & Loss a/c 20,000

———— ————-

5,67,000 5,67,000

————- ————-

Calculate Short term solvency and Long term solvency Ratios.

Section – C

Answer any two questions (2×20 = 40)

With the help of the following ratios regarding Indu films draw the Balance Sheet of

the Company for the year 1985.

Current ratio 2.5

Liqudity ratio 1.5

Net Working capital Rs.3,00,000

Stock Turnover ratio (cost of sales / closing stock) 6 times

Gross profit ratio 20 %

Debt collection period 2 months

Fixed assets turnover ratio (on cost of sales) 2 times

Fixed assets to shareholders net worth 0.80

Reserve and surplus to capital 0.50

From the following information relating to Indian Cricket Club, prepare Income and Expenditure Account for the year ending 31^st March,1991 and Balance Sheet as at that date. Abstract of Hon. Secretary’s cash book for the year is as follows :

Rs. Rs.

To members’ subscription 8,000 By Upkeep of field and pavilion 2,000

To members’ admission Fee 300 By Expenses regarding Tournament 3,700

To sales of Old Balls, Bates,etc 50 By Rates and Insurance 1,500

To Hire of Ground 300 By printing and stationery 100

To subscription for Tournament 4,000 By Bats , Balls,etc. 2,700

To Bank drawn 4,000 By Bank Lodged 16,650

To Donation 10,000

——— ———

26,650 26,650

———- ———

Assets on 1^st April ,1990 : Rs.

Cash at bank 3,000

Stock of Bats, Balls, etc 1,500

Printing and stationery 200

Subscription due 500

Liabilities on 1^st April ,1990 nil

Donation and surplus on account of tournament should be kept in reserve for a permanent pavilion. Subscription due at 31st March,1991,Rs.750 ; Write off 50 percent of Bats , Balls Account and 25 percent of printing and stationery account.

From the following Trial Balance as on 31.3.2001, Prepare Trading Account , Profit

and Loss Account for the year ended 31.3.2001 and a Balance Sheet as on that date

Debit Balance Rs Credit Balance Rs

Drawings 3,600 Capital 40,000

Machinery 10,000 Purchase Return 1,240

Stock 13,750 Discount Received 980

Purchases 1,09,600 Sundry Creditors 15,000

Sales Return 1,800 Sales 1,30,150

Carriage Outwards 2,300

General Expenses 1,100

Advertisement 1,350

Wages 2,600

Rent and Taxes 3,500

Bad Debts 970

Sundry Debtors 33,950

Bank 2,500

Cash 350

————- ————-

1,87,370 1,87,370

————- ————–

The following adjustments are necessary –

Machinery is to be depreciated by 5% p.a

Outstanding wages Rs . 250.
Write off bad debts Rs . 700.
Rent & Taxes paid in advance Rs 100.

Stock on 31.3.2001 Rs . 19,500.

Go To Main page