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St. Joseph’s College of Commerce II Sem Advanced Accounting – I Question Paper PDF Download

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st. joseph’s college of commerce (autonomous)
END SEMESTER EXAMINATION – MARCH/APRIL 2015
B.COM  – II SEMESTER
C1 12 201: ADVANCED ACCOUNTING – I
Duration: 3 Hours                                                                                             Max. Marks: 100
SECTION – A
I) Answer ALL the questions.  Each carries 2 marks.                                        (10×2=20)
  1. Find out the Admissible Claim from the following:

 

Particulars Rs.
Value of stock on the date of fire 25,000
Value of stock saved from fire 5,000
Value of the Insurance Policy 20,000
There is an average clause in the policy.  
  2. If the Fair Value of an Equity Share is Rs. 125 and its Intrinsic Value is Rs. 175, find its Yield Value.
  3. What are Trade Receivables?
  4. Under what heading and sub-headings will you show the following items in the final a/c’s of a company?

a)      Patents b)     Bills payable
c)      Building under construction d)     Provision for tax
  5. What is Recoupment of Shortworkings?
  6. What Entry do you pass in the books of Head Office, when Mysore Branch receives Rs. 5,000 dividend on investments on behalf of the Head Office?
  7. Mention any two objectives of Branch Accounting.
  8. The face value of the Equity Shares of a company is Rs. 20 and the current market price is Rs. 27.  The company issues right shares at the rate of three equity shares for every 5 existing equity shares held, the right shares being priced at Rs. 23.  Calculate the value of right.
  9. Mention the methods of valuation of Non-purchased Goodwill.
  10. Explain  Inter-branch transactions?
 

SECTION – B
II) Answer any FOUR questions.  Each carries 5 marks.                                      (4×5=20)
  11. You are required to calculate value of each Equity Share based on Discounted Cash Flow Method from the information given below:

a)Free Cash Flow Estimates:

Year 1 2 3 4 5
Free Cash Flows (Rs) 1,80,000 1,50,000 2,40,000 1,10,000 1,80,000

 

b)After tax Cost of Capital is 17.5%

c)Present Value factor at 17.5%

Year 1 2 3 4 5
PVF @ 17.5% 0.85 0.72 0.62 0.52 0.45

d) No. of Equity Shares = 50,000.
  12. A fire occurred on 25th April, 2014 in the premises of a company.  From the following particulars ascertain the amount of claim to be lodged in case of the loss of stock which was insured.

Particulars Rs.
Stock on 01.01.2014 2,50,000
Purchases from 01.01.2014 to date of fire 10,00,000
Wages 2,00,000
Manufacturing Expenses 1,00,000
Sales from 01.01.2014 to the date of fire 15,00,000

The Gross Profit Ratio is 15%.  The stock salvaged was estimated at Rs. 57,500.

 
  13. The books of Shiva Ltd. showed an amount of Rs. 4,00,000 to the credit of Profit and Loss Account on 31st March, 2014 out of which directors decided:

 

a)      To place Rs. 60,000 to General Reserve and Rs. 40,000 to Debenture Redemption Fund.

b)     The directors further recommended placing Rs. 25,000 to a Special Reserve Fund (to provide for contingencies).

c)      To pay bonus of 4% of the profits to employees.

d)     The payment of annual dividend on Rs. 6,00,000  8% Cumulative Preference Shares and a dividend at 15% on Equity Share Capital of Rs. 10,00,000 was also recommended by the Board of Directors.

 

Prepare Profit and Loss Appropriation Account for the year ending 31st March, 2014.

 
  14. Write the format for the Statement of Profit and Loss as required by the Companies Act., 2013.

 
  15. Shri. Chakravarthy of Kolkata has a branch in Mumbai.  Goods are supplied to the branch at cost.  The branch sells goods for cash and on credit.  The expenses of the branch are paid from Kolkata and the branch keeps a sales journal and the debtors’ ledger only.  From the following information supplied by the branch, prepare the Branch Account in the books of H.O.

 

Opening Stock (1.4.2013) 39,600
Closing Stock (31.03.2014) 29,700
Credit Sales 67,650
Cash Sales 28,875
Receipt from Debtors 62,535
Sundry Debtors on (31.03.2014) 15,114
Goods received from H.O. 49,500
Goods in transit from H.O. on 31.03.2014 5,940
Expenses paid by the H.O. for the branch 17,160
   

16.

  

Following are the particulars of   Mr. Mohan:-

 

a) Profits after tax earned in 2012=Rs. 82,500, 2013= Rs. 79,200 and 2014=Rs. 85,800.

b) Profits of 2013 is reduced by Rs.8,250 due to stock destroyed by fire and profits of 2012 include a non-recurring income of Rs.4950.

c) Profits of 2014 include Rs.3,300 being income on investment.

d) The stock is not insured and it is thought expedient (wise) to insure the stock.  Insurance premium= Rs. 825 per annum.

e) Fair remuneration to the proprietor not taken into calculation of profits is Rs.16,500 per annum.

Calculate Goodwill on the basis of 2 years purchase of the average profits of the last 3 years. Tax Rate = 50%.

 
SECTION – C
III) Answer any THREE questions.  Each carries 15 marks.                                (3×15=45)                                                                                                 
  17. From the following details, calculate the claim for Loss of profit.

a) Date of Fire: 1St September 2014.

b) Indemnity Period: 6 months.

c) Period of Disruption: 1st September 2014 to 1st February 2015.

d) Sum Insured: Rs. 3,70,260.

e) Sales were Rs. 20,40,000 for the preceding financial year ended on 31st March 2014.

f) Net Profit for preceding Financial Year Rs. 1,22,400 plus Insured Standing Charges Rs. 2,44,800.

g) Rate of Gross Profit = 18%.

h) Uninsured Standing Charges = Rs. 20,400.

i) Turnover during the disruption period = Rs. 2,29,500.

j) Annual Turnover for 12 months immediately preceding the date of fire Rs. 22,44,000.

k) Standard Turnover, i.e., for corresponding months (1st September 2013 to 1st February 2014) in the year preceding the date of fire Rs. 7,65,000.

l) Increase in Cost of working capital Rs. 40,800 with saving of Insured Standing charges Rs. 15,300 during disruption period.

m) Reduced Turnover avoided through increase in Working Capital cost Rs. 1,02,000.

n) Special Clause stipulated – a) Increase in rate of GP= 2% and b) Increase in Standard and Annual Turnover = 10%.
  18. Amar Traders obtained a lease of a coal mine on 1st April 2009 on the following terms:

a)      Royalty: Re.1 per tonne.

b)     Minimum Rent Rs. 12,000 per annum.

c)      Recoupment of shortworkings of each year during the next 3 years subject to a maximum of Rs. 2,500 per annum.

d)     In the event of strike, the minimum rent would be taken pro-rata on the basis of actual working days, but in the event of lockout, the lessee would enjoy a concession in respect of minimum rent for 50% of the period of lockout.

e)      Working for the first 5 years is as follows:

 

Year Actual Royalty (Rs.)
2009-10 7,000
2010-11 10,200
2011-12 19,000
2012-13 10,800   (strike 73 days)
2013-14 9,000     (Lockout for 4 months)

 

Prepare in the books of Amar Traders:

 

a)      The Analytical Table

b)     Royalty A/c

c)      Shortworkings A/c

d)     Landlord’s A/c

 
  19. G Ltd. proposed to purchase business carried on by S Ltd. Goodwill for this purpose is agreed to be valued at 3 years purchase of the weighted average profits of the last 4 years.

Year Profits after tax (Rs) Weights
2011 60,600 1
2012 74,400 2
2013 60,000 3
2014 90,000 4

 

On the scrutiny of the A/c’s the following matters are revealed:

 

a.      On 1.1.2013 a major repair was made in respect of plant incurring Rs.30,000 which was  charged to revenue. The said sum is agreed to be capitalized, subject to adjustment of depreciation at 10% p.a on Reducing Balance Method.

b.     The closing stock of the year 2012 was overvalued by Rs.12,000.

c.       To cover management cost, an annual charge of Rs.24,000 should be made for the purpose of goodwill calculation.

d.     Compute the value of Goodwill.  Tax Rate = 40%.
  20. The following is the balance sheet of X Ltd as on 31-3-2014.

 

LIABILITIES Amt ASSETS Amt
Authorized and Issued:

5,000 Equity shares of Rs.100 each fully paid

 5,00,000

 

 Land and building 2,20,000
Profit and Loss A/C 1,03,000 Plant and machinery 95,000
Bank overdraft 20,000 Stock 3,50,000
Creditors 77,000 Sundry Debtors 1,55,000
Provision for taxation 45,000    
Proposed dividend 75,000    
Total 8,20,000 Total 8,20,000

 

The net profits of the company after deducting all working charges and providing depreciation and taxation are as under:

 

31.03.2010 31.03.2011 31.03.2012 31.03.2013 31.03.2014
85,000 96,000 90,000 1,00,000 95,000

 

On 31-03-2014, Land and Building were valued at Rs.2,50,000 and Plant and Machinery at Rs.1,50,000.

 

In view of the nature of the business, it is considered that 10% is a reasonable return on average capital employed.   For the purpose of valuation of shares, Goodwill is calculated at 5 years purchase of super profits based on the average profits of the last 5 years.

 

Additional depreciation of Land & Building and Machinery may be ignored.

 

Calculate the intrinsic value of shares – a) Ex-dividend   and

 

b) Cum-dividend.

 
  21. A Delhi merchant has a Branch at Chennai to which he charges out the goods at cost plus 25%.  The Chennai Branch keeps its own sales ledger and transmits all cash received to the Head Office every day.  All expenses are paid from the Head Office.  The transactions for the Branch were as follows:

Stock (1.4.2013) at I.P 27,500 Bad Debts 750
Debtors (1.4.2013) 250 Allowances to customers 625
Petty Cash (1.4.2013) 250 Return Inwards 1250
Cash Sales 6,625 Cheques sent to Branch:  
Credit Sales 59,875       Rent 1,500
Goods sent to branch at I.P. 50,000       Wages 500
Collection on ledger accounts 52,500       Salaries and other expenses 2,250
Goods returned to H.O. at I.P 750 Stock (31.03.2014) 32,500
Debtors (31.03.2014) 5,000 Petty Cash (31.03.2014) including Misc. Income Rs. 63 not remitted 313

Prepare the Branch Trading and Profit and Loss Account and Branch Account for the year 31.03.2014.
SECTION – D
IV) Case Study                                                                                                              (1×15=15)                                                                                           
  22. Vishnu and Co. Ltd has two branches, one in Mysore and the other in Chennai.  The Director of Vishnu and Co. Ltd., appointed YOU as an accountant of the Company.

 

a)      You are asked to Pass Journal Entries in the Books of Vishnu and Co, Ltd., for the following transactions:

 

i)                   Goods worth Rs. 50,000 supplied by the H.O. to the Mysore Branch on 25th March 2014 were received by the latter on 3rd January 2014.
ii)                 On behalf of the H.O. the Chennai Branch received a sum of Rs. 25,000 as interest.
iii)              Goods valued at Rs. 1,50,000 were transferred from Chennai Branch to Mysore Branch as per the instructions given by the H.O.
iv)               Chennai Branch paid Rs.10,800 for certain goods purchased by the H.O.
v)                 Mysore Branch collected Rs. 2,500 from a customer on behalf of H.O.

 

b)     You have also been provided with the following Balance Sheet of the Company.  You are required to redraft it as per Schedule III of the Companies Act, 2013.

 

Vishnu and Co. Ltd.

Balance Sheet as at 31.03.2014

Liabilities Amount Assets Amount
80,000 Equity Share Capital of Rs. 10 each 8,00,000 Goodwill 50,000
General Reserve 50,000 Building 6,00,000
Profit and Loss A/c 75,000 Furniture 14,400
6% Debentures 6,00,000 Plant and Machinery 5,94,000
Term Loans 2,28,000 Investments 95,000
Bills payable 76,000 Stock 1,10,000
Sundry Creditors 1,00,000 Debtors 1,65,300
Provision for tax 10,000 Cash in hand 15,500
    Cash at Bank 2,79,800
    Bills Receivables 15,000
Total 19,39,000 Total 19,39,000

 

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St. Joseph’s College of Commerce 2015 Fundamentals Of Accounting Question Paper PDF Download

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ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)
END SEMESTER EXAMINATION – SEPT/OCT. 2015
B.COM(BPM)– I SEMESTER
C3 15MC101: FUNDAMENTALS OF ACCOUNTING
Duration: 3 Hours                                                                                      Max. Marks: 100
SECTION – A
I) Answer ALL the questions.  Each carries 2 marks.                                (10×2=20)
  1. If a radio seller-proprietor buys a radio for his personal use from out of his business funds, the amount paid for the radio will be treated as what? And which accounting concept is applicable? Why?
  2. Differentiate between Trade discount and Cash discount.
  3. Prudence is a concept to recognize unrealized profits and not losses. Is this statement true or false? Explain.
  4. What is error of principal? Give an example.
  5. Classify the following accounts into Personal, Real and Nominal Accounts:

1) Drawings A/c; 2) Rent A/c ; 3) Cash A/c; 4) Goodwill A/c.
  6. Cost of goods sold is 2,00,000 and gross profit is 25% on sales Find out Sales?
  7. What is a Suspense Account? When is it opened?
  8. Distinguish between Reserves and Provisions.
  9. What are the different types of Subsidiary books?
  10. Show the Accounting Equation effect for the transaction prepaid rent in advance.
SECTION – B
II) Answer any FOUR questions.  Each carries 5 marks.                              (4×5=20)
  11. Enter the following transactions in a Simple Cash Book for December, 2014:

Date Particulars Amount (Rs.)
1st Commenced business with  cash 50,000
2nd Bought goods for cash 28,000
5th Received cash from Arun 2,000
7th Paid cash to Sanjay 2,900
10th Paid wages 3,000
14th Received from Rajesh 950
16th Paid into Bank 10,000
18th Cash Sales 2,500
20th Purchased Stationery for cash 250
23rd Paid Suresh Cash 3,900
26th Received from Rakesh 1,900
30th Paid Salaries 2,000
  12. Under which Heading and Sub-Heading the following items appear in the Balance Sheet as per Companies Act, 2013:

1) Debit Balance of Profit & Loss A/c 6) Building under construction
2) Matured Debentures 7) Plant & Machinery
3) Unexpired Insurance 8) Share Premium
4) Preliminary Expenses 9) Secured Loan
5) Goodwill 10) 8% Debentures
  13. The Capital Structure of the BNML Ltd. consisted of:

1) 2,00,000 Equity shares of Rs. 10 each fully called up (calls-in-arrears Rs. 20,000).

2) 10,000, 12% cumulative preference shares of Rs. 100 each fully called up.

12,000, 13% convertible debentures of Rs. 1,000 each.

From the following information, prepare the Profit and Loss Appropriation Statement of BNML Ltd. for the year ended 31st March, 2015:

Balance brought forward from last year Rs. 2,00,000 (credit)

Current year’s profit after all necessary adjustments Rs. 9,20,000

The Board of Directors at the annual general meeting approved the following appropriations:

a.      Provide 15% dividend on equity shares.

b.      Provide for taxation Rs. 30,000.

c.       Dividend Equalization Fund Rs. 42,000.

d.     Transfer to Debenture Redemption Reserve Rs. 36,000.

e.      Rs. 40,000 to be transferred to Reserve Fund and Rs. 26,000 to Sinking Fund.

f.        Provide for Corporate Dividend Tax. (@ 20.358%)
  14. From the following information prepare a Trial Balance as on 31.3.2015: (Amount in Rs.)

Capital Account 12,500 Stock on (1.4.2014) 3,460
Sales 15,450 Purchases 5,475
Furniture and Fittings 640 Bank (Cr Balance) 2,850
Motor Car 6,250 Purchase Returns 125
Buildings 7,500 Commission (Cr) 375
Total Debtors 3,800 Sales Returns 200
Total Creditors 2,500 Advertisement 250
Bad Debts 125 Interest Account (Dr.) 118
Cash Balance 650 Insurance & Tax 1,250
Salaries 4,082    
  15. State whether the following transaction is capital or revenue expenditures, profits or losses or deferred and give reasons for the same:

1)Rs. 15,200 spent on repairs before using a second hand car purchased recently.

2) During the year Rs. 30,000 were spent on repairing of various machines.

3)Freight and cartage on the new machine Rs.  12,000, erection charges Rs. 32,000.

4)Rs. 2,00,000 were spent on advertising in connection with the introduction of a new product.

5)Received Rs.1,00,000 as subsidy from State Government.

 
  16. From the ledger balances, prepare Trading and Profit & Loss Account for the year ending 31. 3. 2015.

Particulars Amount (Rs.)
Stock on 1st April, 2014 60,000
Sales 3,00,000
Sales Returns 10,000
Purchases 2,40,000
Purchase Returns 3,000
Carriage Inwards 4,000
Carriage Outwards 6,000
Salaries and Wages 30,000
Bank Interest Paid 2,000
Printing & Stationery 6,000
Discount Received 1,000
Discount Allowed 5,00
Audit Fees 2,000
Insurance Premium 3,000
Trade Expenses 500
Stock on 31.3.2015 75,000
SECTION – C
III) Answer any THREE questions.  Each carries 15 marks.                        (3×15=45)                                                                                                 
  17. From the following and other particulars of M/S Preethi and Shreethi given below. You are required to prepare Trading and Profit & Loss A/c for the year ending 31.3.2015 and Balance Sheet as on that date:

Particulars Debits Credits
Preethi’s Capital   46,615
Shreethi’s Capital   46,615
Preethi’s Drawings 3,410  
Shreethi’s Drawings 3,410  
Purchases and Sales 83,290 1,26,177
Debtors and Creditors 47,800 22,680
Returns 7,422 3,172
Wages 9,915  
Manufacturing Wages 2,500  
Stock on 1.4.2014 21,725  
Factory Fuel and Power 542  
Office Salaries 3,745  
Factory Lighting 392  
Carriage Inwards 897  
Carriage Outwards 960  
Plant & Machinery 55,000  
Fixtures & Fittings 1,720  
Bills Payable   6,422
Traveling Expenses 925  
Cash in Hand 68  
Cash at Bank 2,425  
Rent and Taxes 1,765  
Office Expenses 2,778  
Discount Allowed 422  
Insurance 570  
TOTAL 2,51,681 2,51,681

Additional Information:

1. Stock on 31.3.2015 is Rs. 16,580.

2. Insurance prepaid Rs. 70.

3. Wages outstanding Rs. 800, salaries Rs. 350 and Rent Rs. 150.

4. Depreciate plant and machinery by 5% and fixtures and fittings by 10%.

5. Reserve 2.5% of Debtors for bad debts.

6. Goods worth Rs. 2,500 is withdrawn by Preethi for personal use.
  18. (a) A book-keeper found that there was Rs. 325 difference in the Trial Balance, being excess credit. Unable to locate errors in time, he decided to place the amount in Suspense A/c. Subsequently, the following errors were found out. Pass Journal Entries for rectifying them and prepare the Suspense A/c.

1. A credit sale of Rs. 100 to Mr. Lal has been credited to his account.

2. A sum of Rs. 50 received from Mr. Bhat has been credited to his account as Rs. 15.

3. The total of the purchases returns book has been over cast by Rs. 50.

4. The discount column on the credit side of the cash book has been overcast by Rs. 10.

5. Rent of Rs. 80 paid to Landlord has been debited to Landlord’s A/c.

6. A sum of Rs. 50 paid for commission has been credited to Commission A/c.                                                                                                  (10 marks)

 

(b)Give the format of Statement of Profit & Loss Account as per Companies Act, 2013.                                                           (5 marks)
  19. Following Trial Balance of Mr. Khan is given to you:

Particulars Debit (Rs.) Credit (Rs.)
Cash 1,20,000  
Drawings 36,000  
Sales Returns 13,000  
Establishment Expenses 62,000  
Deposits with bank 22,000  
Capital   2,00,000
Sales   8,00,000
Purchases 6,68,000  
Debtors 1,77,000  
Bad Debts 14,000  
Insurance 8,000  
Creditors   49,000
Purchase Returns   18,000
Commission   12,000
Stock (1.4.2014) 1,55,000  
Furniture and Fixtures 11,000  
Bills Payable   40,000
Bills Receivable 13,000  
Bank Overdraft   1,80,000
TOTAL 12,99,000 12,99,000

Additional Information:

1) Outstanding expenses: salary Rs. 6,000 and rent Rs. 4,000.

2) Prepaid insurance Rs. 2,000.

3) Commission includes Rs. 3,000 received in advance for the next year.

4) Interest on bank overdraft Rs. 33,000 to be paid.

5) Depreciation on furniture and fixtures 20% p.a.

6) Stock on 31.3.2015 Rs. 68,000.

Prepare Trading and Profit& Loss Account for year ending 31.3.2015 and also Balance Sheet as on that date.
  20. Journalise the following transactions in the books of Mr. Rajeev:

1) 2015, Aug 01: Mr. Rajeev started his business with Rs. 80,000 in cash, brought office furniture worth Rs. 25,000 and stock of goods valued at Rs. 30,000 and loan from his wife Rs. 24,000.

2) Aug 02: Purchased goods from Mr. Madhu for cash Rs. 28,000 and paid carriage on the same Rs. 500.

3) Aug 05: Invoiced goods to Mr. Dinesh Rs. 4,000.

4) Aug 07: Purchased from Mr. Prakash goods worth Rs. 12,000.

5) Aug 09: Received rent from tenant Rs. 2,500.

6) Aug 11: Mr. Rajeev withdrew for personal use Rs. 3,000.

7) Aug 13: Paid cash for advertisement inserted in newspapers Rs. 750.

8) Aug 15: Returned to Mr. Prakash goods damaged in transit and sent him a debit note Rs. 500.

9) Aug 19: Paid interest at 10% p.a. to Mrs. Rajeev on her loan.

10) Aug 28: Mr. Dinesh returned goods valued at Rs. 200 as being defective.
  21. Prepare daily Balance Sheets for the following transactions and show its effect:

DAY 1: Commenced business with Cash Rs. 20,000; Goods Rs. 50,000 and Furniture Rs. 30,000.

DAY 2: Purchased goods from Gagan on credit Rs. 40,000.

DAY 3: Sold goods for cash Rs. 40,000 (Costing Rs. 30,000).

DAY 4: Sold goods to Ram on Credit Rs.  65,000 (Costing Rs.  50,000)

DAY 5: Purchased typewriter for personal use by the proprietor Rs. 20,000.

DAY 6: Purchased chairs for office use for cash Rs. 10,000.

DAY 7: Withdrew for personal use goods costing Rs. 5000.

DAY 8: Paid for printing Rs. 500 and received commission Rs.1,200.

DAY 9: Paid to Gagan Rs. 30,000.

DAY 10: Introduced fresh capital Rs. 40,000.

DAY 11: Business received a bona fide offer of Rs.20,000 for the business.
SECTION – D
IV) Case Study                                                                                                      (1×15=15)                                                                                           
  22. From the following balances extracted on 31st March 2015 from the books of Modern Ltd, prepare a Balance Sheet in the form prescribed under the Indian Companies Act, 2013 (Show all notes to accounts):

Particulars Amount Amount
Land 80,000  
Cash in Mill 7,000  
Share Capital   6,30,000
Building 2,12,500  
Calls in arrear 25,000  
Creditors   6,18,000
Capital Reserve   1,54,000
Preliminary Expenses 30,000  
Brokerage on shares 12,000  
Stores 90,000  
Wages Due   29,000
Godown Rent Due   3,600
Stock in trade 2,50,000  
Unexpired Insurance 8,200  
Cash in Office 1,25,000  
Employee Benefit Fund   15,000
Salaries Due   3,500
Bad Debts Provision   6,500
Cash at Bank 62,000  
Livestock 4,900  
Machinery 5,08,000  
Loose tools 1,30,000  
Debtors 1,20,000  
Unclaimed Dividend   5,000
Profit & Loss A/c   2,00,000
15% Debentures   1,00,000
Bank Loan Account   1,50,000
Investments 2,50,000  
TOTAL 19,14,600 19,14,600

Note: Bills Discounted but not matured Rs. 40,000.

 

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