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Seat No.: Enrolment
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA SEMESTER 2 • EXAMINATION WINTER 2016
Subject Code: 4120504 Date: 21/11/2016
Subject Name: Financial Accounting
Time: 10.30 AM TO 05.30 PM Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1

What is accounting? Explain the functions and needs of Accounting.
07
Q.1

The following are the details of a spare part of Golden Mills:
1-1-2016 Opening stock Nil
1-1-2016 Purchase 100 units Rs. 30 per unit
15-1-2016 Issued for use 50 units
1-2-2016 Purchases 200 units Rs. 40 per unit
15-2-2016 issued for use 100 units
20-2-2016 Issued for use 100 units
1-3-2016 Purchases 150 units Rs. 50 per unit
15-3-2016 Issued for use 100 units
Find out the value of stock as on 31-3-2016 as per weighted average basis.
07
Q.2

What is journal? Why it should be recorded in books and give detail of rules of journalizing the transactions.
07

Define corporate financial statements and write the importance of corporate financial statements.
07
OR

A firm purchased a machine on 1 January 2006 for Rs. 2,00,000. A new machine was purchased for Rs. 80,000 on 1 July 2007. It is decided to write off depreciation on machinery at 10% p.a. according to WDV method. Accounts are closed every year on 31st December. Prepare the machinery account for three years from 2006.
07
Q.3

Explain the meaning and scope of GAAP in detail.
07

What do you mean by inventory? Give the differences between LIFO and FIFO method.
07
OR
Q.3
From the following Trial balance of Mr. Kumar as on March 31, 2016 prepare the Trading and Profit loss Account for the year ended on March 31, 2016 and a Balance sheet on that date:
Particulars Debit Balance Rs. Credit Balance Rs. Capital 1,00,000 Building 15,000
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Drawings 18,000 Furniture 7,500 Motor car 25,000 Loan from Akshay 12% 15,000 Interest paid on above Loan 9,00 Purchases and Sales 75,000 1,00,000 Opening stock 25,000 Establishment expense 15,000 Wages 2,000 Insurance 1,000 Commission 7,500 Debtors and Creditors 28,100 10,000 Bank balance 20,000 Total 2,32,500 2,32,500
Additional Information:
Value of the closing stock as on Mar 31, 2016 is Rs. 32,000
Outstanding wages amounted to Rs. 500
Insurance Prepaid is Rs. 300
Commission received in advance amounted to Rs. 800
Depreciate Building by 2.5% Furniture by 10% and Motor car by 10%
Allow interest on capital 10% p.a.
Charge Rs. 500 as interest on drawings.
Balance of interest due on the loan is also to be provided for.
Q.4

Stars Ltd. Purchased some fixed asset for consolidated price; Details of the market values of these assets as appraised by a valuer are also given. Determine the cost of each asset find out individual cost price of assets. Name of Asset Consolidated price Market value Land 600000 Building 1600000 Machinery 1200000 Furniture 800000 Total 3000000 4200000
07

Explain in detail the vertical form of Balance sheet with its specimen.
07
OR
Q.4

Write a brief note on Trial Balance. Explain the types of errors.
07

How will you classify the following into Personal, Real and Nominal accounts?
1. Computer Account
2. Trademark Account
3. Commission received Account
4. Mr. Raja's Account
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5. Outstanding salary account
6. Bank of CANARA Account
7. Wages Account
Q.5

Write short notes on the following:
1. Goodwill
2. AS-10
3. Amortization
07

Journalize the following transactions in the books of Mr. Ravindra;
1. Paid rent of building Rs. 12,000 half of the building is used by the proprietor for residential purpose.
2. Mr. Ravindra paid life insurance premium Rs. 2,000
3. Salary due to clerk Rs. 5,00
4. Charge depreciation on furniture 10% p.a. for 1 month Furniture Rs. 12,000)
5. Received commission Rs. 1,000 half of which is in advance.
6. Paid income tax Rs. 3,000
7. Purchase a laptop of Sony Rs. 50,000
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OR
Q.5

Write a brief note on valuation of investment.
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Explain the given concepts: 1. Accrual 2. Going Concern 3. Materiality
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