LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Sc.,B.A. DEGREE EXAMINATION –MATHS.,CHEM.,ECONOMICS
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 30th 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 31st 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 1st April ,1990 : Rs.
Cash at bank 3,000
Stock of Bats, Balls, etc 1,500
Printing and stationery 200
Subscription due 500
Liabilities on 1st 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.
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