M.Com. (Semester (CBCS) Examination Oct/Nov-2017
ADVANCED ACCOUNTANCY I
Day Date: Thursday, 23-11-2017 Max. Marks: 70
Time: 10.30 AM to 01.00 PM
Instructions: All questions are compulsory.
Figures to the right indicate full marks.
Q.1 Choose the correct alternatives: 14
Policy maturing only on death of insured is termed as
Endowment policy Whole life policy
With profit policy General policy
The degree of completion of work is determined by comparing the work
certified with
Contract price Work in process
Cash received on contract Work uncertified
The historical cost method treats human resources like
Current assets Other fixed assets
Investment None uncertified
At the end of the year Royalty a/c is closed by transferring its balance to

Short working a/c Landlord a/c
P&L a/c Lessees a/c
As per IRDA regulations an insurance company is required to prepare

Revenue a/c P&L a/c
Balance sheet All of the above
The Lessee's right to recoup short workings is related to
First three years Terms of agreement
Subsequent two years None of the above
Non-departmental items of expenses are charged to
Departments on the basis sales
Departments on the basis of fixed assets
General P&L a/c
None of the above
accounting provides useful information to the management about
direct recruitment and promotion; retrenchment etc.
Labor Cost Human Resource
Recruitment All of the above
It is given that the additional reserve for unexpired risks was Rs. 50000 in
the beginning of the year. The net premium for the current year were Rs.
400000, additional reserve for unexpired risk was to be increased by of
the net premium. Hence the amounts of additional reserve will be
20000 50000
70000 100000
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10) The cost of electric power should be apportioned over different departments
according
Value of machines No. of light points
Horse power of machines Equal basis
11) Work certified at the end of the accounting year is values
Cost Cost plus profit made to date
Cost plus profit taken to P&L a/c None of these
12) Royalty account is the nature of
Personal a/c Real a/c
Nominal a/c None of these
13) Whenever the Lessor receives a payment he
Lessees a/c Royalty a/c
Landlord a/c Short working a/c
14) costs are incurred to identify the possible sources of employees.
Recruitment Selection
Hiring and department Orientation
Q.2 Answer the following 14
Write a note Advantages of HRA.
Write a note on Escalation clause and Work certified.
Q.3 From the following particulars you are required to prepare Fire Revenue
Account for the year ending 31st Dec. 2015.
Particulars Rs. Particulars Rs.
Claims paid 480,000 Commission 200,000
Claims outstanding

40,000 Commission on
reinsurance ceded
10,000
Claims intimated but not
accepted (31/12/2015)
10,000 Commission on
reinsurance accepted
5,000
Claims intimated
accepted but not Paid on
31/12/2015
60,000 Expenses of
Management
305,000
Premiums received
during the year
1200,000 Provision for Unexpired
risk on 1/1/2015
400,000
Re-insurance premium 120,000 Additional provisions for
Unexpired risk
20,000
Bonus in reduction of
premium
12,000
You are required to provide for additional reserve for unexpired risk at
of the net premium in addition to opening balance.
Mr. Gupta the proprietor of a departmental store wants to calculate separate
profit for two departments i.e. X and Y out of five departments for the month
ending 31st July 2016. Stock at the end will be the balancing figure after
considering the rates of gross profit 40% for department X and 30% for
department Y.
Following figures are available
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Particulars Dept. X Dept. Y
Stock 9000 8400
Sales 42000 36000
Purcha ses 27000 21600
Genera l expenses 5490 8520
Indirec t expenses for the whole business (five departments) are Rs. 10800
which are to be charged equally for all departments
Prepare departmental trading and profit and loss account for the period.
Q.4 Any one 14
The following balances appeared in the books of the X Life Assurance Co.
Ltd. As on 31st March 2016
Debit balances Rs Credit balances Rs.
Claims paid during the
year-
Life assurance fund at
the beginning of the
year
50000,000
By death 2200,000 Premiums less reassurances
15000,000
By maturity 1500,000 Claim outstanding at
the beginning of the
year-
Furniture at cost
(including Rs.40,000
brought during the year)
250,000 By death 900,000
Printing and stationary 77,000 By maturity 600,000
Cash on current
account
1350,000 Creditors 530,000
Cash in hand 30,000 Consideration for
annuities granted
2,000
Surrenders less
reassurances
40,000 Interest dividends 1800,000
Commission 250,500 Registration fees 2,000
Management expenses 3100,000 Deposits 100,000
Deposits with electricity
company
500 Provision for tax 300,000
Advance payment of
income tax
50,000 Premium deposits 1150,000
Agents balance 100,000 Contingency reserve 150,000
Income tax 450,000 Furniture depreciation
a/c
40,000
Income tax on interest
and dividends
500,000 Building depreciation
a/c
300,000
Loans and mortgages 150,000
Loans on policies 3250,000
Investments 52120,000
Building at cost
(Including Rs. 85,000
during the year)
5400,000
Prepare revenue account and balance sheet for the year on 31st March
2016 after considering following adjustmentsPage
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Claims outstanding at the end of the year-
By death Rs.600,000
By maturity Rs. 400,000
Management expenses outstanding Rs. 60,000 and prepaid
Rs.15,000.
Make provision of Rs. 45,000 for depreciation on building; Rs 15,000
for depreciation on furniture and Rs. 110,000 for taxation-
Premium outstanding Rs.2028,000 and commission thereon Rs.
65,000.
Accrued interest and dividends Rs.380,000
OR
On the 1st April 2006 Bhopal Coal Ltd on lease a mine from Surya Ltd. Under
the contract royalty was payable Rs. 10 per tonnes of coal extracted with
an annual minimum rent of Rs.1,00,000. Short Workings if any were
recoverable only during the first three years of contract. The output for the
four years is noted below;
31st March 2007 6000 tonnes
31st March 2008 10,500 tonnes
31st March 2009 13,000 tonnes
31st March 2010 20,000 tonnes
You are required to-
Prepare a statement of working.
Show journal entries in the books of landlord for all the years.
Q.5 Any one 14
Mr. X runs departmental stores having three departments, trial balance of
which is given below for the period ended on 31st March 2016.
Particulars Debit Credit
Debtors 32000
Opening stock
A 10000
B 8000
C 4000
Cash in hand 155
Cash in bank 1545
Plant and machinery 27500
Creditors 10650
Trade expenses 1075
Sales
A 70000
B 50000
C 44500
Carriage outwards 400
Salaries 2225
Rent 900
Bills payable 7500
Purchases
A 55000
B 35000
C 28750
Land and buildings 54500
Discount 1100
Capital 79500
262150 262150
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Adjustments-
The stock at the end- Rs.8000 Rs.4000 Rs.400
Rs. 400 are to be written off as bad and is to be provided for
doubtful debts.
Charge depreceation-10% on plant and machinery; on land and
building.
Allocate all unallocated expenses in the ratio of over three
departments.
Prepare trading and profit and loss for the year ended 31st March 2016 and
balance sheet as on that date.
OR
The following is the ledger balance of Himalayan Construction Company
engaged on the execution of ABC Apartments for the year ending 31st
March 2016.
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. 2500,000. The contract price was Rs.3000,000. Cash
received on account of contract up to 31st March 2016 was Rs. 900,000
(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. 1000,000 was
returned to stores and wages outstanding were Rs. 2500. Plant and
Machinery at site is to be depreciated at 5%.
Prepare the Contract Account and Balance sheet.