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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034 B.B.A.DEGREE EXAMINATION BUSINESS ADMINISTRATION FIRSTSEMESTER APRIL 2017
BU 1502 BU 2501 FINANCIAL ACCOUNTING
Date: 18-04-2017 Dept. No. Max. 100 Marks
Time:01:00-04:00 SECTION A (10X2=20Marks) I ANSWER ALL THE QUESTIONS
1. Differentiate SLM from WDV.
2. What is interest on drawing? Is it an income or an expense?
3. What do you mean by double entry system?
4. State 2 defects of Single entry.
5. State the purpose of preparing a statement of affairs.
6. Why departmental accounts are prepared?
7. State two limitations of instalment system.
8. A machinery purchased for Rs.2,00,000 installation charges Rs.2,000, transportation charges Rs.5250 and import duty Rs.23,000 was spent on the machine. Scrap value Rs,21,000, life of the machine 7 years. Calculate depreciation under Straight Line method.
9. Find out the credit sales from the following information. Sundry debtors on 1-1-2002 Rs.12,800, sundry debtors on 31-12-2002= 9,800, bills receivable as on 1-1-2002 Rs.400, cash received= Rs.6,400, bills receivable as on 31-12-2002= 2,500, bad debts Rs.300, discount= Rs.350.
10. Calculate the profit earned during the period: Capital as on 31stDec Rs.28,600, Capital as on 1st Jan- Rs.25,000, Proprietors withdrawals for personal use Rs.7,200, Additional capital introduced during the year Rs.4,000.
SECTION B (4X10=40 Marks) II ANSWER ANY Five QUESTIONS
11. Distinguish Hire Purchase System from Installment Purchase.
12. A Manufacturing concern whose books are closed on 31st March, Purchased Machinery for Rs.1,50,000 on 1st April,1998. Additional Machinery was acquired for Rs.40,000 on 30th September,1999 and for Rs.25,000 on 1st April, 2001. Certain Machinery, which was purchased for Rs.40,000 on 30th September, 1999 was sold for Rs.34,000 on 30th September,2001.
Give the Machinery Account for the year ending 31st March 2002 taking into account depreciation at 10% per annum on Written down value.
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13. A commenced business on 1st January, 2002 with a capital of Rs.25,000. He immediately bought furniture for Rs.6,000. During the year he borrowed Rs.15,000 from his wife and introduced additional capital of his own amounting to Rs. 9,500. He had withdrawn Rs.900 at the end of each month for family expenses. On 31st December,2002, his position was as follows:
Cash in hand Rs.600, cash at Bank- Rs.7,800, Sundry Debtors Rs.14,400, Stock Rs. 20,400, Bills Receivable Rs.4,800, sundry Creditors- Rs.1,500, Rent due Rs.450. Furniture to be depreciated by 10% Ascertain the profit or loss made by A during 2002.
14. A head office in Tiruchy has a branch in Coimbatore. From the following information prepare Coimbatore branch account.
Rs. Rs.
Stock on 1-1-95 Stock on 31-12-95 Debtors 1-1-95 Credit sales Cash sales Cash received from debtors Goods sent to branch
8,400 12,800 13,450 24,850 14,600 23,870 23,760
Goods returned by branch Bad debts at branch Remittance by H.O. for expenses: Salaries Rent rates taxes
1,000 650 4150 4020
15. X co, agreed to purchase wagons on hire-purchase system for Rs.4600. Rs.1400 were paid when wagons were acquired on 1stJuly 2001 and the balance was to be paid by half-yearly installments of Rs.800 plus interest at p.a. Depreciation charged by X& Co is 10% on diminishing balance methods. Accounts are closed on 30thJune each year.
Prepare ledger account to record the above in the books of the purchaser.
16. The sundry debtors on 31st Dec, 95 are Rs.40,000. On analysis, it is found that debtors for Rs.36,000 are good. The debtors for Rs.3,000 are doubtful and are estimated to realize 2/3rds of the amount and the debtors for Rs.1,000 are bad. Make a provision for doubtful debts and show how it appears in the balance sheet.
17. On 1st Jan 2007, Mr.Ragav purchased a machine on hire purchase under a hire purchase agreement which provided for an initial payment of Rs.1, 500 and the balance in 4 equal half- yearly instalments of Rs. 2,000 each, the first instalment falling due on 30th June 2007. Assuming the rate of interest of p.a. Determine the cash price of the machine.
SECTION C (2X20=40 Marks) III ANSWER ANY TWO QUESTIONS
18. The following details were extracted from the records of Mr.Velu,as on 31st March,2012:
Debit balances
Credit balances
Plant Machinery- 20,000 Manufacturing wages- 34,500 Salaries- 15,850 Furniture- 10,000 Freight on purchases- 1,860 Freight on sales- 2,140 Buildings-24,000 Opening stock-34,200 Motor car-12,000 Sales returns- 3,100 Baddebts-1,400
Capital account- 80,000 Sundry creditors-44,560 Bank loan-15,000 Purchases returns- 1,740 Sales- 2,50,850 Provision for bad debts-2,000
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Interest and bank charges-400 Cash at bank-4,200 Cash in hand-1,120 Manufacturing expenses-9,500 Insurance and tax-4,250 Goodwill-25,000 General expenses-8,200 Factory fuel and power-1,280 Sundry debtors-78,200 Factory lighting-950 Purchases 1,02,000
Prepare a trading, P&L account for the year and the Balance sheet by considering the following additional information:
Stock in hand as on 31st March,2012- 30,500
Depreciate Plant Machinery by Furniture Motor Car- Rs.1,000.
Bring provision for bad and doubtful debts to 5%on sundry debtors.
A commission of on the gross profits is to be provided for works manager
A commission of on the Net Profit (after charging the works manager' commission) is to be credited to the General Manager.
19. Mr. Young keeps his keeps books on single entry system. From the following prepare trading and profit and loss account for the year ended 31stMarch, 2002 .together with the balancesheet on the date.
Cash book
2002 March 31
To Debtors To sales
25,000 15,000
2001 April 1 2002 March31
By bank overdraft Interest Drawings Salaries Expenses Creditors Balance c/d Bank Cash
4,000 100 2,000 8,500 7,900 15,000 2425 75
40,000
40,000
The following are the other information
1-4-2001 Rs.
31-3-2002 Rs.
Stock in hand Creditors Debtors Office premises Furniture
9,000 8,000 22,000 15,000 1,000
10,220 5,500 30,000 15,000 1,000
Provide interest on Young's capital balance as on 1-4-2001. Provide Rs.1,500 for doubtful debts. on depreciation of fixed assets. on group commission as incentive to staff has to be provided for on net profit after meeting all expenses and the commission.
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20. A head office in Delhi has a branch at Mumbai where goods are invoiced at cost price. From the following particulars prepare the necessary ledger accounts in the books of H.O.
Stock 1-1-2002 Debtors on 1-1-2002 Petty cash at branch on 1-1-2002 Goods sent to branch Cash sales Cash received from debtors Goods returned to H.O. Bad debts Discount and allowances
8000 7000 1000 40,000 15000 30,000 2000 500 1500
Goods returned from customers Expenses of branch: Salaries-8000 Rent taxes-1,000 Petty cashes- 1,200 Stock as on 31-12-2002 Debtors on 31-12-2002 Petty cash at branch 31-12-2002
4000 10,200 12,000 10,000 800
21. From the data, prepare departmental trading and profit and loss account and thereafter the combined income account revealing the concern's true result for the year ended 31st December, 2002.
Departments
A Rs.
B Rs.
Stock Jan1 2002 Purchases from outside Wages Transfer of goods from dept. A Stock Dec 31, 2002 Sales to outsiders
40,000 2,00,000 10,000 30,000 2,00,000
20,000 1,000 50,000 10,000 71,000
entire stock represents goods from Dept. A which transfers them at 25% above its cost. Administrative and selling expenses amount to Rs.15,000 which are to be allocated between departments A and B in the ratio of 4:1 respectively.