Loyola College B.Com April 2006 Financial Ac And Financial Statement Analysis Question Paper PDF Download

             LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

UG DEGREE EXAMINATION

TH 4

FOURTH SEMESTER – APRIL 2006

                         CO 4201/3101 – FINANCIAL A/C AND FINANCIAL STATEMENT ANALSYIS

 

 

 

Date & Time : 22-04-06/1.00 – 4.00 p.m.   Dept. No.                                                       Max. : 100 Marks

 

 

SECTION – A

Answer all questions.                                                  (10 x 2 = 20 marks)

  1. What is the basic Accounting Equation?
  2. Name the parties interested in Accounting information.
  3. Fill in the blanks by choosing the right world
    • Long term loan from bank _______ liability (Fixed/current)
    • Plant and machinery in _______ Asset (Fixed/current)
  1. How is Accounting related to Statistics?
  2. State the rules for Debiting and Crediting.
  3. Distinguish between Reserves and Provisions.
  4. Calculate the stock at the end.

Opening stock Rs.10,000, Sales Rs.50,000, Purchases Rs.35,000, Profit on cost 1/3

  1. Calculate price earning ratio:

Net profit after Tax and preference dividend Rs.2,50,000; No. of Equity shares 40,000;
market price per share Rs.50.

  1. What is cash flow statement?
  2. What is error of principle?

 

SECTION – B

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

  1. What is double entry system? Explain the concepts of double entry system.
  2. Distinguish between single entry and double entry.
  3. Enumerate the advantages of Cash Flow Analysis.
  4. Mr. Ram keeps his books by Single entry. He gives the following information from
    which he requires you to ascertain his profit or loss during the year ended 31.12.97.

    • 12.97

(Rs.)                               (Rs.)

Bank balance                             740 (Cr)                     400 (Dr.)

Cash in hand                           —-                                  10

Debtors                                   5100                            8800

Sundry creditors                     1300                            1950

Stock                                       1700                            1900

Plant                                        2140                            2140

Mr. Ram had withdrawn Rs.250 per month and introduced fresh capital of Rs.600 on

1st July, 97.  A provision of 5% on debtors is necessary.  Write off depreciation on plant
at 5%.  Interest on capital is to be allowed at 5% p.a.

  1. A Ltd. purchased on 1.1.93 a second hand plant for Rs.12000, and spend immediately
    Rs.8000 on its overhauling.  On 1.7.93, additional plant costing Rs.10000 is purchased.
    On 1.7.95 the plant purchased on 1.1.93 having become obsolete is sold for Rs.4000 and
    on the same date fresh plant is purchased at a cost of Rs.24000.  Depreciation is provided
    at 10% per annum on original cost on 31st December every year.  Show plant A/C as it
    would appear at the end of each year from 1993 to 1995.
  2. Give rectifying journal entries wherever relevant assuming the difference in trial balance
    has  been placed to suspense account.
  • purchase of motor car for Rs.15,000 has been debited to Repairs account.

(ii) A sale of Rs.5,000 to Mr. Ram has been wrongly entered in sales book as Rs.500.

(iii) An entry in the purchase returns book of Rs.2,000 has been omitted to be posted
in the account of Mr. Ramji

(iv) An amount of Rs.2,000 received from Shrikant has been posted to credit of
Shriram as Rs.200.

  1. The Ratios relating to a Company are given below.

Gross profit 15%

Stock velocity – 6 months;  Debtors velocity – 3months

Creditors velocity – 3 months; Gross profit of the year ending amounts to Rs.60,000.

Closing stock is equal to opening stock.  Find out:

(a) Sales           (b) Closing stock         (c) Debtors      (d) Creditors

  1. Rule the three-column cash book of a merchant.

1998

July        1        Commenced business with Rs.10,000

2        Paid into bank Rs.8,000

7        Purchased goods by cheque Rs.3,000

  • Paid Rent Rs.210

12        Purchased furniture by cheque Rs.180

15        Cash sales Rs.750

  • Gave Mr. Gopal a cheque for Rs.970, Discount received from him Rs.25

18        Received from Narayan a cheque for Rs. 1500 and he was allowed to
discount of Rs.30.

  • Paid into bank Rs.1500
  • Drew for office use Rs.400

31        Withdrew for personal use by cheque Rs.150.

 

SECTION – C

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

  1. The following is the Trial balance of Arun as on 31.12.97 is given to you. Prepare final
    accounts.

Debit balances                         Rs.                   Credit balances           Rs.

Opening stock                                         15,500 Capital                                     90,000

Land and building                                  35,000 Sundry Creditors                      9,600

Machinery                                               50,000 Purchase Returns                      2,100

Furniture                                                   5,000 Sundry incomes                        1,200

Purchases                                                         1,06,000 Reserve for bad debts                  300

General expenses                                    19,200 Sales                                     2,07,000

Wages                                                     26,000

Freight on purchases                                 2,800

Carriage on sales                                       8,500

Sundry debtors                                       30,000

Bad debts                                                                 600

Cash in hand                                                100

Cash at bank                                             6,400

Sales Returns                                            5,100

———–                                             ————

3,10,200                                             3,10,200

———–                                            ————-

 

Adjustments:

  1. wages outstanding Rs.2100
  2. Included in General Expenses an insurance premium Rs.600 paid for the year ending 31st March 1998.
  3. Provision of 5% on Debtors for bad debts required.
  4. Depreciate : Land and building 2% ; machinery 10% and Furniture 15%.
  5. Closing stock Rs.14,900.

 

  1. Given below is the sumarised balance sheet and profit and loss A/c of metals Ltd.

Balance Sheet

Liabilities Rs. Assets Rs.
4,000 shares of Rs. 100 each 40,00,000 Land and building 30,00,000
Reserves and Surplus 18,00,000 Plant 16,00,000
Sundry creditors 26,00,0000 Stock 29,60,000
Profit and Loss A/c 6,00,000 Debtors 14,20,000
6% Debentures 6,00,000 Cash at bank 6,20,000
96,00,000 96,00,000

 

Profit and Loss A/c

To opening stock 19,90,000 By Sales 1,70,00,000
To Purchases 1,09,05000 By closing stock 29,80,000
To direct Expenses 2,85,000
To Gross profit 68,00,000
1,99,80,000 1,99,80,000

 

To Administration Expenses 30,00,000 By Gross profit 68,00,000
To selling Expenses 600,000 By non-operating incomes 1,80,000
To interest 300,000
To other non-operating expenses 80,000
To net profit 30,00,000
69,80,000 69,80,000

 

Calculate

  1. Current Ratio 6. Stock Turnover Ratio
  2. Quick Ratio 7. Fixed Assets Turnover Ratio
  3. Fixed Assets Ratio 8. Debtors Turnover Ratio
  4. Debt Equity Ratio 9. Operating Ratio
  5. Proprietory Ratio 10. Creditors Turnover Ratio

 

 

  1. The balancesheet of XYZ Ltd. for the years 1989 and 1990 were as follows:

 

Liabilities 1989 1990 Assets 1989 1990
Rs. Rs.
Share capital 1,50,000 1,75,000 Building 1,10,000 1,50,000
Profit and Loss A/c 20,000 80,000 Plant 2,00,000 1,40,000
Loan from bank 1,40,000 20,000 Stock 50,000 45,000
Creditors 85,000 93,000 Debtors 70,000 80,000
Outstanding Expenses 5,000 7,000 Cash 15,000 22,000
Bills payable 50,000 40,000 Prepaid expenses 5000 3,000
Loan from IFCI Bank 25,000
4,50,000 4,40,000 450000 44,0000

 

Additional information:

  1. Net profit for the year 1990 Rs. 60,000
  2. During the year plant costing Rs. 25000 was sold for Rs.13000 (accumulate depreciation Rs.10,000)
  3. Depreciation for the year 1990 Rs.45000

You are required to prepare cash flow statement.

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