M.Com. (Semester (CBCS) Examination Mar/Apr-2018
ADVANCED ACCOUNTANCY I
Time: 2½ Hours
Max. Marks: 70
Instructions: All questions are compulsory. Figures to the right indicate full marks.
Q.1
Choose the correct alternatives:
14
The document containing the terms of an insurance contract is known as
Agreement
Policy
Schedule
None of these
In insurance the lum sum amount of premium received in the beginning is called as
Bonus
Surrender value
Consideration for annuities granted
Annuities
is the policy which matures on the death of the insured.
Whole life Policy
Endowment Policy
Annual Policy
None of the Above
bonus is that which is payable only on the maturity of the policy.
Reversionary Bonus
Interim bonus
Bonus in reduction of premium
All the above
The periodic payment made by lessee to lessor for rights to use certain properties is termed as
Rent
Wages
Bonus
Royalty
The royalty agreement contains a clause for the payment of fixed minimum amount to the lessor every year such amount is called as
Salary
Minimum rent
Wages
All the above
When royalty is less than minimum rent then short-workings account should be on royalty account.
Credited
Two side
Debited
None of the above
Minimum rent also called as
Dead rent
Fixed rent
Flat rent
All of the above
Contract costing is also termed as
Terminal costing
Standard costing
Cost plus costing
All of the above
10) The person who undertakes and executes work under a contract is called as
Contractee
Contractor
Policy holder
All of the above

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11) Contract account is a account.
Personal
Real
Nominal
None of these
12) The written down value of plant should be written on side of contract.
Credit
Debit
Both
None of these
13) In the departmental accounting packing expenses should allocated on the basis of
Asset value
Turnover
Purchases
Area
14) Accounting for people as the organizational resources is termed as
Human Resource Accounting
Social Responsibility Accounting
Environmental Accounting
Financial Accounting
Q.2
Answer the following.
14
Write a note on Minimum Rent and Short working.
Write a note on Human Resource Accounting.
Q.3
Answer any one:
14

The following are the expenses on a contract which commences on 1st January 2016.
Particulars
Rs.
Materials purchased
1,00,000
Materials on hand
5,000
Direct wages
1,50,000
Plant issued
50,000
Direct expenses
80,000
The contract price was Rs. 1500,000 and the same was duly received when the contract was completed in August, 2016. You are required to charge indirect expenses at 15% on wages and provide Rs. 10,000 for depreciation on plant. Prepare the contract account and the contractee's account.

From the following particulars, prepare the Fire Revenue Account 2011-12.
Particulars
Rs. In (lakhs)
Claims
235
Legal expenses regarding claims
5
Premium received
600
Reinsurance premiums
60
Commission
100
Expenses of management
150
Provision for unexpired risk on April 2011
260
Claims unpaid on April 2011
20
Claims unpaid on March 31, 2012
35
Q.4
Answer any one:
14

The following is the ledger balance of Himalayan Construction Company engaged on the execution of ABC Apartments for the year ending 31st March, 2016.
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Particulars
Rs.
Direct Wages
1,25,000
Bank Balances
66,500
Rates and Taxes
7,500
Direct Expenses incurred
2,500
General overhead allocated
6,000
Fuel and power expenses
62,500
Materials issued to contract
7,00,000
Furniture
30,000
Plant and Machinery at site)
12,50,000
Land and building
11,50,000
The ABC Apartments was commenced on 1st April 2015. Himalayan paid up capital of Rs. 25,00,000. The contract price was Rs. 30,00,000. Cash received on account of contract up to 31st March 2016 was Rs. 9,00,00 (being 90% of the work certified). Work completed but not certified was estimated at Rs. 50,000. As on 31st March 2016 materials at site was estimated at Rs. 15,000. Machinery at site costing Rs. 1,00,000 was returned to stores and wages outstanding were Rs. 2,500. Plant and Machinery at site is to be depreciated at 5%.
Prepare the Contract Account and Balance Sheet.

M/s. Star auto garage have the three department i.e. car, bike and servicing. The former two sell spare parts and occupy a godown and a showroom. The service department uses a garage and adjoining site. The following particulars given to you.
Car
Bike
Servicing
Stock 1/4/15
1,00,000
27,500
Purchases
3,50,000
1,10,000
Sales
6,00,000
3,00,000
1,00,000
Wages of salesman
30,000
12,000
Other information
Particulars
Rs.
Wages of garage labor
10,800
Office salary
12,000
Godown and showroom rent
24,000
Land and garage building
2,72,000
Office expenses
36,000
Garage equipments
1,00,000
Showroom furniture
70,000
Office van
24,000
Debtors
12,000
Creditors
60,000
Bank overdraft
17,200
Power lighting
36,000
Bank interest
1,000
Cash in hand
900
Drawings
12,000
Proprietor capital
1,63,000
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You are required to prepare:
Departmental trading and Profit and Loss A/c
General Profit Loss A/c
Balance sheet after considering following adjustments
i. Land and garage building includes cost of site used by service dept. Rs. 2,00,000
ii. Closing stock Car Rs. 90,000; Bike Rs. 32,500
iii. 50% of power and lighting charged to service dept.; the balance equally to other departments.
iv. Rates for depreciation are building equipments furniture van 20%.
v. Outstanding expenses are interest Rs. 150; office expenses Rs. 2,000
vi. Interest and all expenses relating to office are charged to general Profit and Loss A/c.
vii. The departments using showroom share the space and furniture equally.
Q.5
Answer any one.
14

The following figures are taken from the books of Life Assurance Corporation for the year ended 31st March 2016. Write up the Revenue account and the Balance Sheet.
Particulars


Claims by death (paid)
3,38,000
Claims by maturity (paid)
2,20,000
Premiums received
Single premiums
2,10,650
New premiums
8,00,000
Renewal business
12,00,000
Bonus paid in cash
1,000
Bonus in reduction of premium
2,000
Agents allowances
28,000
Salaries
45,000
Travelling expense
2,500
Directors fees
8,700
Auditors fees
2,500
Medical fees
40,000
Commission
2,10,000
Income tax on interest and dividend
4,750
Law charges
500
Advertising expenses
4,300
Printing and stationery
12,200
Postage and telegrams
2,100
General expenses
1,800
Surrenders
35,000
Re-assurance premium
30,000
Interest and dividends
2,70,000
Policy renewal fees
1,700
Life assurance fund (1.4.2015)
26,85,000
Share capital (5000 shares of Rs. 100 each)
5,00,000
Investments
42,00,000
Furniture and fixtures
10,000
Agents balances
40,000
Cash at Bank
15,000
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Loan on corporation policies
55,000
Annuities
30,000
Consideration for annuities granted
75,000
Unpaid dividend
12,000
Investment fluctuation fund
5,70,000
Mortgage on freehold property
10,00,000
Creditors
17,500
Cash in hand
3,500
63,41,850
63,41,850
The following adjustments are to be made:-
Outstanding premium Rs. 21,000
Commission due to agents Rs. 8,000
Allowance due to agents Rs. 1,700
Depreciate furniture and fixtures by
Provide Rs. 20,000 for investment fluctuation fund.
Claims outstanding by death Rs. 15,000 and by maturity Rs. 12,000
Interest outstanding Rs. 21,000
OR

Ajay Ltd. Leased a colliery on 1st January 2010 from M/s. Sathe at a minimum rent of Rs. 40,000 p.a. at a Royalty of Rs. 3 per ton with a right to recover short working over the first three years of the lease.
The output for the first four years of the lease was as follows:
Year
Output (tons)
2010
10000
2011
12000
2012
14000
2013
20000
You are required to:
Prepare a statement of working.
Show necessary journal entries in the books of Ajay Ltd. for four years.