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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034 B.B.A.DEGREE EXAMINATION BUSINESS ADMINISTRATION SECONDSEMESTER APRIL 2017
16UBU2MC01- FINANCIAL ACCOUNTING
Date: 25-04-2017 Dept. No. Max. 100 Marks
Time: 01:00-04:00 PART A Answer ALL the questions: (10 X 1. Why Final Accounts are prepared? 2. Write short note on Obsolescence. 3. What do you mean by average clause in an insurance policy? 4. Explain the term Goods in Transit. 5. Write a note on IFRS. (20.5) 6. Write the adjusting entries for closing stock and outstanding expenses. 7. A B are sharing profits in the ratio of 4:3. They admit C into partnership for 1/3rd share in future profit. Calculate the new profit sharing ratio.
8. A machine was purchased for 10000 the estimate life is 3 years and the scrap value is 1000. Find the rate of depreciation, under Straight Line method.
9. Stock of 200000 of M/s. Print shop Co, has been insured for 170000. Loss due to fire is assured as 190000. Calculate what claim the insured would get from the insurance company. 10. Q and R are sharing profits in the ratio of Q retires and the new profit ratio agreed between the continuing partners P and R is 4:3. Calculate the Gaining ratio. PART B Answer any FOUR Questions: (4X10=40) 11. Explain the meaning and objectives of Indian Accounting Standards. 12. What are the factors taken into account while calculating the amount of depreciation? 13. Rice, Wheat and Tea are partners sharing profits and losses in the ratio of 4:3:2. Tea retires from the firm and for this following were revalued;
a. Stock to be reduced by 5000
b. Machinery to be depreciated by 6000
c. Furniture to be brought down by 4000
d. An outstanding liability has to be provided at 2000
e. Building to be increased by 26000 The continuing partners decide not to show the revised value of assets and liabilities other than cash in their new books. Prepare a Memorandum Revaluation Account.
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14. Vinay Ltd purchased a machine for 150000 on 1st July 2003. On 1st Jan 2004 another machine was
purchased for 50000. On 31st Dec 2005, the machine purchased on 1st July 2003 became obsolete
and was sold for 100000. Depreciation 10% p.a. on written down value to be provided. The accounts are closed on 31st December every year. Prepare Machinery Account. 15. A fire occurred in premised of M/s Ezhil Co., on 10th September 2008. All stock was destroyed except to
the extent of 6200. From the following figures, ascertain the loss suffered and claim to be made by the business. There is no average clause in the policy.
Stock on 1.1.2007 40000 Purchases during 2007 145000 Sales during 2007 200000 Purchases from 1.1.2008 to the date of fire 152200 Sales from 1.1.2008 to the date of fire 189000 Stock on 31.12.2007 25000 16. A head office has a branch at Erode to which goods are sent at invoice price which is cost plus 25%. From the following particulars, prepare the branch A/c in the books of head office. Debtors on 1.1.2006 20,000 Stock on 1.1.2006 10,000 Cash sales 2,00,000 Credit sales 1,50,000 Cash collected from debtors 85,000 Debtors on 31.12.2006 Stock on 31.12.2006 8,500 Goods sent to branch 50,000 17. From the following balances taken from the books of Shri Ram as n 31.3.2006. Prepare Trading and Profit Loss account on the date
Particulars
Particulars
Stock on 1.4.2005
2500
Purchases
20000
Insurance
10000
Wages
500
Carriage Inwards
200
Commission received
1000
Sales returns
5000
Purchase returns
2000
Stationery
750
Office expenses
550
Sales
50000
Discount Allowed
100
Adjustments: a. Closing stock was valued at 15000.
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PART C Answer any TWO Questions: X 20 40) 18. Enumerate the procedure for treatment of Goodwill on retirement as per AS 10. 19. From the following balances taken from Sri. Vimal on 31st Dec. 2009, prepare the final statements:
Particulars
Particulars
Capital
300000
Purchase Returns
8460
Purchases
240000
Bad Debts
4200
Sales
421110
Bad Debts provision
9720
Drawings
52800
Insurance
3900
Opening Stock
34380
Discount Received
570
Rent
6300
Sales Returns
12720
Wages
18840
Buildings
75000
Carriage outwards
50820
Sundry Debtors
186210
Carriage inwards
6930
Furniture Fittings
10500
Postage
4440
Salary
29610
Cash in hand and bank
47550
Admin. Expenses
4020
Additions to building
21000
Sundry Creditors
56760
Adjustments:
a. Stock on 31st December 2009 is valued at 42870.
b. Depreciate the existing building 2.5% and additions to building and Furniture 10%.
c. Write off bad debts from the book at 1710.
d. Provision for bad debts on debtors of 5
e. Salary outstanding was 1710.
f. Rent to be received during the year 2009 is 400.
g. Unexpired Insurance 720.
h. Interest on capital 5%.
20. Toplid purchased a machine for 66000 and spent on its installation 9900 on 1.7.2004. On
1.1.2005, the company purchased a new machine for 39600. On 30.6.2006 the machinery purchased
on 1.1.2005 was sold for 26400 and on 1.7.2006, a new machine was installed at a cost of 49500. The depreciation is 10% p.a. on diminishing balance method. The accounts are closed by the company on 31st March every year. Show the machinery account and Depreciation account for the first
three years. 21. From the following data prepare Departmental Trading and P L A/c and thereafter the combined
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income account revealing the concern true for the period ended 31.12.2009.
Particulars
Dept. A
Dept. B
Stock (1.1.2009)
40000

Purchases
200000
20000
Wages
10000
1000
Transfer of goods from Dept. A

50000
Stock (31.12.2009)
30000
10000
Sales
200000
71000
entire stock represents goods from Dept. which was transferred to them 25% above the
cost. Administration expenses came to 15000 to be allocated to A and B in the ratio of 4:1 respectively. 22. Raj, Vijay and Vasanth are partners sharing profits and losses in the ratio of 4:3:2. Their Balance Sheet as on 31.12.2008 is as follows:
Liabilities
Assets
Capital Raj Vijay Vasanth
40000 30000 20000
Cash Stock Debtors Furniture
25000 30000 30000 20000
Reserve Fund
30000
Land Building
40000
Sundry Creditors
25000
145000
145000
They agreed to admit Kamal as a partner into the firm on the following terms:
a. The stock to be valued at 40000
b. Furniture to be depreciated by 10%
c. Land Building value to be appreciated by 20%
d. The goodwill of the firm is fixed at 45000
e. The goodwill account shall be written to the partners with the new profit sharing ratio
f. Provision for bad debts to be created at on debtors
g. Kamal shall bring in 40000 as capital for his 1/3rd share.
Prepare Revaluation Capital account and the Balance Sheet of the new firm.