Loyola College B.B.A. Business Administration April 2007 Financial Accounting Question Paper PDF Download

LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.B.A.

MS 04

DEGREE EXAMINATION –BUSINESS ADMINISTRATION

SECOND SEMESTER – APRIL 2007

BU 2500FINANCIAL ACCOUNTING

 

 

Date & Time: 20/04/2007 / 1:00 – 4:00            Dept. No.                                                     Max. : 100 Marks

 

 

 

PART – A

 

Answer ALL the questions:                                                                   (10 x 2 = 20 marks)

 

  1. List out any two causes for Depreciation.
  2. Write short notes on:
  3. a) Short sales b) Standing turnover
  4. What is meant by General ledger?
  5. What is ‘Royalty’?
  6. Pass necessary adjustment entries for the following adjustments:
  7. a) Insurance unexpired is Rs. 5,000
  8. b) The proprietor has withdrawn goods worth Rs. 3,000 from stock.

 

  1. What should be the basis of allocation for the following expenses under Departmental Accounts?
  2. a) Carriage inward b) Maintenance of premises.

 

  1. From the following particulars, calculate closing branch debtor’s balance:

Branch Debtors (1.1.2005)                 Rs.   6,300

Credit sales                                         Rs. 39,000

Cash received from debtors                Rs. 41,200

 

  1. Sonu purchased a typewriter 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 instalment.

 

  1. Compute short workings recovered from the following particulars assuming short workings are recoupable in the following two years:

Royalty: Rs. 5 per ton

Dead rent: Rs. 45,000 p.a.

Output: 2000 – 10,000 tonnes, 2001 – 16,000 tonnes, 2002 – 20,000 tonnes.

 

  1. From the following information ascertain opening stock (i.e., on 1.1.2004)

Rs.

Purchases made during year 2004                  2,50,000

Sales made during year 2004                          3,25,000

Stock on 31.12.2004                                          60,000

Wages                                                                              3,000

Rate of gross profit on cost                                   25%

 

 

 

 

 

PART – B

 

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

 

  1. Distinguish between Hire purchase system and Instalment purchase system.

 

  1. What is single entry? What are its salient features?

 

  1. From the following balances as at 31st Dec. 2005 of a trader, prepare a Trading and

Profit & loss A/c for the year 2005 and a Balance Sheet as on that date.

Rs.                                                                     Rs.

——————————————————————————————————–

Salaries                                  5,500     Creditors                                             9,500

Rent                                      1,300     Sales                                                  32,000

Cash                                      1,000     Capital                                               30,000

Debtors                               40,000      Loans                                               10,000

Trade expenses                         600

Purchases                            25,000

Advances                              2,500

Bank balances                      5,600

———–                                                         —————

81,500                                                              81,500

————                                                         —————Adjustment:

(i)  The closing stock amounted to Rs. 9,000.  (ii)  One month’s salary is outstanding

(iii)   One month’s rent has been paid in advance, (iv) Provide 5% for doubtful debts.

 

  1. Amol started business on 1-1- 1990 and he purchased a machine for Rs. 70,000. He purchased further machinery on 1st August 1991 costing Rs. 15,000 and on 30th September 1994 costing Rs. 20,000. He adopted a policy of charging 15% p.a. depreciation under Diminishing Balance Method.

On 1-1-1994 it was decided to change the method and rate of depreciation to 10% on straight line basis with retrospective effect from 1-1-90. The accounts are closed every year on 31st December. Calculate the differences in depreciation to be adjusted in the machinery account on 1-1-1994 and show the ledger account for the years 1990 to 1994.

 

  1. A fire occurred in the business premises of Ranjit on 19.7.89. From the following particulars ascertain the loss of stock and prepare a claim for insurance.

Rs.

Stock on 1.1.88                                                36,720

Stock on 31.12.88                                            32,400

Sales for 1988                                               2,16,000

Purchases for 1988                                        1,46,400

Purchases from 1.1.89 to 19.7.89                 1,76,400

Sales from 1.1.89 to 19.7.89                         1,80,000

 

The stocks were always valued at 90% of cost. The stock saved from fire was worth Rs.21,600. The amount of the policy was Rs.75,600 and included an average clause.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  1. The proprietor of a large retail store wished to ascertain approximately the net profit of the X, Y, and Y departments separately for the three months ended 31st March 1996. It if found impracticable actually to take stock on the date, but an adequate system of departmental accounting is in use, and the normal rates of gross profit for the three departments concerned are respectively 40%, 30% and 20% in turnover before charging the direct expenses. The indirect expenses are charged in proportion to departmental turnover.

The following are the figures for the departments:

——————————————————

X                        Y                       Z

Rs.                     Rs.                      Rs.

——————————————————

Opening stock (1-1-96)                                      10,000                 14,000                7,000

Purchases                                                           12,000                 13,500                9,700

Sales                                                                   20,000                 18,000              16,000

Direct expenses                                                    2,000                   1,500                   700

 

The total indirect expenses for the period (including those relating to other departments) were Rs. 5,400 on the total turnover of Rs. 1,08,000.

Prepare a statement showing the approximate net profit, making a stock reserve of 10% for each department on the estimated value on 31-3-96.

 

  1. From the following detail, prepare the purchase ledger adjustment A/c in General ledger and General ledger Adjustment A/c in purchase ledger for the year 2005.

 

Purchase Ledger balance on 1.1.2005 (Cr)                 1,20,000

Purchase Ledger balance on 1.1.2005 (Dr)                   10,000

Purchases from creditors                                            1,80,000

Bills payable accepted                                                   40,000

Cash paid to creditors                                                             1,00,000

Cheques paid to creditors                                              30,000

Cheques dishonoured                                                                  1,000

Goods returned to creditors                                           10,000

Discount allowed by creditors                                         2,000

Interest on suppliers accounts due                                   1,000

Bills payable dishonoured                                                4,000

 

  1. On 1.1.1982, Sona Collieries Ltd., leased a piece of land agreeing to pay a minimum rent of Rs. 2,000 in the first year, Rs. 4,000 in the second year and thereafter Rs. 6,000 per annum, merging into a royalty of 40 paise per tonne, with power to recoup short workings over the first three years only.

The figures of annual output for the four years to 31st December 1985 were 1,000, 10,000, 18,000 and 20,000 tonnes respectively. Prepare the analytical table, and also the Shortworkings A/c and Landlord’s A/c in the books Sona.

 

 

 

 

 

PART – C

 

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

 

  1. Mohan commenced business on 1.1.2005 with a capital of Rs. 25,000. He immediately bought furniture for Rs. 4,000. During the year, he borrowed Rs. 5,000 from his wife and introduced a further capital of Rs. 3,000. He has withdrawn Rs. 600 at the end of each month for family expenses. From the following particulars obtained from his books, you are required to prepare Trading and P& L A/c and Balance Sheet on 31.12.2005.

Rs.

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

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

Carriage                                                                                                   700

Wages                                                                                                                 300

Discount allowed                                                                                    800

Salaries                                                                                                 6,200

Bad debt written off                                                                            1,500

Trade expenses                                                                                     1,200

Advertising                                                                                          2,200

 

Mohan has used goods worth Rs. 1,300 for private purposes and paid Rs. 500 to his son which is not recorded anywhere. On 31.12.2005, his debtors were worth Rs. 21,000 creditors Rs. 15,000 and stock in trade Rs. 10,000. Furniture to be depreciated at 10% p.a.

 

 

  1. A head office invoices goods to its branch at cost plus 25%. Branch remits all cash received to the head office and all expense are met by the H.O. From the following particulars of the branch, prepare Branch Stock A/c, Branch Debtors A/c and Branch

P & L A/c.

Rs.                                                                         Rs.

——————————————————————————————————–

Stock on 1.1.2004                    16,000       Total amount deposited

(invoice price)                                                       in the H.O. A/c                 1,27,000

Returned of goods to H.O                    5,000

Stock on 31.12.2004                17,000                       (invoice price)

(invoice price)

Debtors on 1.1.2004                12,000        Salaries paid                                         6,000

Debtors on 31.12.2004            14,000        Rent paid                                              4,000

Cash sales                                60,000        Discount allowed to customers            2,000

Bad debts written off                 1,000       Spoilage                                                2,000

 

  1. On 1.1.90 National Transport Company purchased from Metro Motors five trucks costing Rs. 40,000 each on the hire purchase system. It was agreed that Rs. 50,000 should be paid immediately and the balance in three installments of Rs. 60,000 each at the end of each year. The Metro charges interest @ 10% p.a. The buyer depreciates trucks at 20% p.a. on the diminishing balance method. The buyer paid cash down and two installments but failed to pay the last installment.

Consequently, the Metro Motors repossessed three trucks leaving two trucks with the buyer and adjusting the value of 3 trucks against the amount due. The trucks repossessed were valued on the basis of 30% depreciation p.a. on the written down value. The trucks repossessed were sold by Metro Motors for Rs. 60,000 after necessary repairs amounting to Rs. 10,000. Open the necessary ledger accounts in the books of both the parties.

 

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