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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
B.A.DEGREE EXAMINATION -ECONOMICS
FIRST SEMESTER APRIL 2018
CO 1102- ACCOUNTING FOR ECONOMISTS
Date: 28-04-2018 Dept. No. Max. 100 Marks
Time: 09:00-12:00
PART A
Answer all the questions: (10x2=20)
1. What is balance sheet?
2. Mention the significance of differential piece rate.
3. Write the meaning of decentralised purchasing.
4. What is inventory?
5. List out any two advantages of marginal costing.
6. What is cash flow statement?
7. Calculate EOQ from the following particulars: Annual usage: 1,20,000, Cost of placing and receiving one order: Rs.60. and Annual carrying cost: 10% of inventory value.
8. Mr.Dravid a worker in a factory is paid on time basis. During the month of September 2011 he has worked for 180 hours. His hourly wage rate is Rs. 120 per hour. Calculate the wages of Mr.Dravid for the month of September 2011.
9. Find the overtime hours and overtime wages from the following:
Actual hours worked: 55, Normal working hours: 48 and Normal wage rate: Rs.50 per hour.
10. Calculate P/V ratio from the following particulars:
Year
Sales
Profit
2010
1,40,000
15,000
2011
1,60,000
20,000
PART B
Answer any four questions (4x10=40)
11. Explain the methods of wage payment.
12. Explain the significance of preparing Cash Flow Statement.
13. What is financial statement? Explain the objectives of financial statement.
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14. Nadan manufacturers Ltd, have three production departments and two service departments P and the details pertaining to which are as under:
Particulars
A
B
C
P
Q
Direct wages
12,000
8,000
12,000
6,000
2,000
Value of machine
48,000
64,000
80,000
4,000
4,000
H.P. of machine
60
30
50
10

Light points
40
60
80
40
20
Floor area Sq. feet)
1,000
1,250
1,500
1,000
250
The following figures extracted from the accounting records are relevant: Rent Rs.15,000, Electricity Rs.2,400, Indirect wages Rs. 6,000, Power Rs.6,000, Depreciation on machines Rs.40,000 and Other labour related costs Rs.10,000. Prepare a statement showing the distribution of overheads to the respective departements.
15. Standard time allowed for a job is 150 hours. The hourly rate of wage is Rs. 50 per hour worked. The actual time taken by the worker was 130 hours. Calculate the total wages on the basis of: Time basis, Halsey premium basis, Halsey weir plan and
Rowan's bonus plan.
16. Two components X and Y are used as follows:
Normal usage: 600 units per week each
Maximum usage: 900 units per week each
Minimum usage: 300 units per week each
Reorderquantity: 4,800 units 7,200 units
Reorder period: 4 to 6 weeks, 2 to 4 weeks.
Calculate for each component:
Reorder level Minimum Level Maximum level Average stock level.
17. From the following information relating to Pandian Bros. Ltd., you are required to compute: P/V Ratio, Break even point, Profit, Margin of Safety and
Volume of sales to earn profit of Rs.6,000.
Particulars
Rs.
Total fixed costs
4,500
Total variable costs
7,500
Total sales
15,000
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PART C
Answer any two questions: (2x20=40)
18. Surya Co. Ltd. is a Company with an authorized capital of Rs. 5,00,000 divided into 5,000 equity shares of Rs.100 each on 31/12/2003 of which 2,500 shares were called up. The following are the balances extracted from the ledger as on 31/12/2003.
Trial balance of Surya Co. Ltd.
Debit
Rs.
Credit
Rs.
Opening stock
50,000
Sales
3,25,000
Purchases
2,00,000
Discount received
3,150
Wages
70,000
Profit Loss A/c
6,220
Preliminary expenses
4,200
Creditors
35,200
Insurance (up to
6,720
Reserves
25,000
Salaries
18,500
Loan from managing director
15,700
Rent
6,000
Share capital
2,50,000
General expenses
8,950
Printing
2,400
Advertisements
3,800
Bonus
10,500
Debtors
38,700
Plant
1,80,500
Furniture
17,100
Bank
34,700
Bad debts
3,200
Calls arrears
5,000
Total
6,60,270
Total
6,60,270
Prepare final accounts for the year ended 31/12/2003. The following further information is given:
Closing stock was valued at Rs. 1,91,500.
Depreciation on plant at 15% and on furniture at 10% should be provided.
Write off preliminary expenses.
Transfer Rs.10, 000 to general reserve.
19. Prepare stores ledger account under LIFO and FIFO method from the following information:
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1st July 2010- opening stock 300 unit at Rs. 10 each
5th July- received 200 units at Rs. 12 each
6th July received 400 units at Rs.11 each.
10th July- issued 250 units
14th July issued 150 units
18th July received 200 units at Rs. 14 each.
19th July issued 300 units.
20th July received 300 units at Rs. 15each.
25th July- received 100 units at Rs. 16 each
28th July- issued 300 units.
20. From the following balance sheet as on 31st December, 2010 and 31st December 2011, you are required to prepare Cash Flow Statement:
Liabilities
2010
2011(Rs.)
Assets
2010
2011(Rs.)
Share capital
70,000
74,000
Bank balance
9,000
7,800
Bonds
12,000
6,000
Goodwill
10,000
5,000
Reserves Surplus
10,000
10,500
Inventories
49,100
43,700
Provision for doubtful debts
700
800
Debtors
14,900
17,500
Sundry creditors
10,300
12,700
Land
20,000
30,000
Total
1,03,000
1,04,000
Total
1,03,000
1,04,000
Following additional information has been supplied to you:
Dividends amounting to Rs.5,000 were paid during the year 2010.
Land was purchased for Rs. 10,000.
Rs.5, 000 were written off on goodwill during the year.
Bonds of Rs.6, 000 were paid during the course of the year.
21. Explain the salient features of marginal costing.
Explain the following terms:
Variable cost Break Even Sales Margin of Safety
Contribution Fixed cost.