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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
B.Com.DEGREE EXAMINATION -COMMERCE
FIRST SEMESTER APRIL 2018
17/16UCO1MC01- FINANCIAL ACCOUNTING
Date: 25-04-2018 Dept. No. Max. 100 Marks
Time: 01:00-04:00
PART A (10 2 20 Marks)
Answer ALL Questions. All Questions carry equal marks.
1. Define 'Single Entry System'.
2. What is meant by 'Balance Sheet'?
3. What do you understand by 'Dependent Branch'?
4. What is meant by 'Hire Purchase System'?
5. What do you understand by 'Salvage Value'?
6. A Company purchased a plant for Rs.60,000. The useful life of the plant is 10 years and the residual value is Rs.15,000. Find out the rate of depreciation under the straight line method.
7. Find out the profit from the following data.
Particulars
Rs.
Capital at the beginning of the year
Drawings during the year
Capital at the end of the year
Capital introduced during the year
8,00,000
2,00,000
9,00,000
50,000
8. From the following information, Compute Opening Branch Debtors:
Particulars
Rs.
Credit sales
Received from debtors by the branch
Branch Debtors (Closing)
Discount allowed to customers by branch
51,000
42,500
7,700
1,800
9. From the following information, Calculate Cash Price of a machine:
Particulars
Rs.
Down Payment
4 annual installments at the end of each year
Rate of interest p.a
10,000
10,000
10. Calculate insurance claim from the following facts assuming that the insurers met their liability under the policy on an 'average basis'.
A trader's stock valued at Rs.40,000 was totally destroyed. The stock in the godown was insured for Rs.30,000 subject to average clause. The balance of stock, left after fire, appeared in the books at Rs.24,000.
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PART B 10 40 Marks)
Answer any FOUR Questions. All Questions carry equal marks.
11. What are the advantages and disadvantages of Diminishing Balance Method of providing depreciation?
12. What are the limitations of Single Entry System of book-keeping?
13. M/s. Maruthu Sons has two departments; cloth and readymade. Readymade clothes are manufactured by the firm itself out of cloth supplied by the cloth department at its usual selling rate. From the following figures, prepare departmental trading and P L A/c and General P L A/c for the year ending 31-12-91.
Particulars
Cloth Dept.
Rs.
Readymade Dept.
Rs.
Opening Stock on 1-1-91
Purchases
Sales
Transfer to Readymade Dept.
Manufacturing Expenses
Closing Stock on 31-12-91
3,60,000
29,00,000
35,00,000
4,50,000

1,00,000
60,000
20,000
7,00,000

1,40,000
48,000
General expenses incurred for both the departments were Rs.1,20,000.
The stocks in the Readymade department may be considered as consisting of 662/3% cloth and 332/3% other expenses. The cloth department earned profit at the rate of 18% in 1990.
14. Find out the purchases and sales from the following details by preparing necessary accounts:
Particulars
Rs.
Opening balance of debtors
Opening balance of creditors
Collections from debtors
Discount received
Bad Debts
Payment to creditors
Discount allowed
Returns inwards
Returns outwards
Cash purchases
Cash sales
Closing balance of debtors
Closing balance of creditors
35,000
15,000
1,65,000
7,500
6,000
19,000
6,500
7,000
8,000
11,000
15,000
40,000
20,000
15. Afire occurred in the premises of M/S Poonusamy on 15- 10- 2009.From the following particulars ascertain the loss of stock and prepare claim for insurance.
Particulars
Rs.
Stock as on 1-2008
Purchase during 2008
30,600
1,22,000
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Sales during 2008
Stock as on 31-012-2008
Purchase from 1-1-2009 to 14-10-2009
Sales from 1-1-2009 to 14-10-2009
1,80,000
27,000
1,47,000
1,50,000
The stock was always valued at 90% of cost. The stock saved from the fire was worth
Rs. 18,000.The amount of policy was Rs. 63,000. There was an average clause in the policy.
16. Ram Co. Ltd. trades in refrigerators on hire purchase system and the accountant furnished the following information for the year 1995:
Year
Particulars
Rs.
1.1.95
31.12.95
Stock in Shop
Installments due and unpaid
Stock out with customers at H.P. Price
Stock in Shop
Installments due and unpaid
Stock out with customers at H.P. Price
Cash received during the year
30,000
18,000
2,40,000
42,000
30,000
2,76,000
4,80,000
He has further stated that the company makes a gross profit of one third on cost. You are
required to prepare the relevant accounts to ascertain profit for the year under Debtors Method.
17. On 1-1-2004 a machinery was purchased for Rs. 80,000.On 1-2005 additions were made to the amount of Rs. 40,000.On 31-03-2006 the machinery purchased on 1-1-2004 costing Rs. 32,000 was sold for Rs. 26,700. On 1-10-2006 additions were made to the extent of Rs. 20,000. Depreciation was provided p a on the diminishing balance method .Books are closed on 31st December every year. Show machinery account from 2004 to 2006.
PART C 20 40 Marks)
Answer any TWO Questions. All Questions carry equal marks.
18. The following are the ledger balances extracted from the books of Vasanthy.
Particulars
Rs.
Particulars
Rs.
Vasanthy's Capital
Bank Overdraft
Furniture
Business Premises
Creditors
Opening Stock
Debtors
Rent from tenants
Purchases
50,000
8,400
5,200
40,000
26,600
44,000
36,000
2,000
2,20,000
Sales
Return inwards
Discount Cr
Taxes Insurance
General Expenses
Salaries
Commission allowed
Carriage on purchases
Provision for Doubtful Debts
Bad debts written off
3,01,000
5,000
800
4,000
8,000
18,000
4,400
3,600
1,000
1,600
Adjustments:-
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i. Stock on hand on 31-12-1995 was estimated at Rs.40,120.
ii. Write off depreciation on business premises Rs.600 and furniture Rs.520.
iii. Make a provision of on debtors for bad doubtful debts.
iv. Allow interest on capital at and carry forward Rs.1,400 for unexpired insurance.
Prepare Final Accounts for the year ended 31-12-1995.
19. On 1-1-2004 Mr. X a television dealer bought 5 television sets from Superfine Television Company on hire purchase system. The cash price of each television set was Rs. 20,000. It was agreed that Rs 25,000 should be paid immediately and the balance in three installments of Rs.30,000 each.at the end of each year. The television company charges interest 10% p a. The buyer depreciates the televisions sets at 20% p a on the diminishing balance method.
Mr. X paid the cash down and the two installments but failed to pay the last installment. Consequently the Television Company repossessed three sets and leaving two sets with buyer and adjusting the value 3 sets against the amount due. The sets repossessed were valued on the basis of 30% depreciation in written down value method annually. The setsrepossessed were sold for Rs 30,000 by the Television Company after making the necessary repairs amounting to rs. 5,000. Open necessary ledger accounts in the books of both parties.
20. Bihar Coal Ltd took a lease of a colliery from Himalaya Coal Ltd on 1stJanuary 2012 at a minimum rent of Rs 15,000 merging into a royalty for Re. 1 per ton with a stipulation to recoup shot workings over the first three years of the lease. The output for the first four years of the lease was 8,000, 13,000, 21,000, and 18,000 tons respectively. Prepare the ledger necessary accounts in the books of Bihar Coal Ltd
21. Meenashi Mills Ltd has a branch at Madurai are invoiced to the branch at cost plus 50%. Branch remits all cash received to the Head office and all expenses are met by the head office. From the following prepare necessary ledger accounts on the stock and debtors system.
Particulars
Rs.
Stock as on 1st January 2005 invoice price)
Debtors as on 1st January 2005
Goods Invoiced to Branch cost
Sales at Branch
Cash sales
Credit sales
Cash collected from Debtors
Goods returned by Debtors
Surplus in stock
Discount allowed to customers
Expenses at Branch
15,600
8.700
36,000
35,000
30,100
29,800
1.500
300
350
6,700