DISTANCE EDUCATION
M.B.A. DEGREE EXAMINATION, MAY 2017.
Second Semester
FINANCIAL ACCOUNTING
(Upto 2012 2013 Academic Year and 2013 Calendar Year)
Time Three hours Maximum 100 marks
PART A — 8 40 marks)
Answer any FIVE questions.
1. Explain any two accounting concepts.
2. What is balance sheet? How does it differ from the profit
and loss account?
3. Prepare the trial balance for the following
Cash 4,000
Plant and machinery 30,000
Sales 10,000
Capital 25,000
Bank loan 6,000
Creditors 15,000
Closing stock 5,000
Outstanding expenses 1,000
Purchases 15,000
Purchases returns 1,000
Outstanding income 4,000
Drawings 3,000
Reserve fund 3,000
Sub. Code
21
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4. What are the defects of single entry system of book
keeping?
5. What is dividend? What are the various sources of
dividend for a company?
6. What is meant by amalgamation? What are its types?
7. What are the various reserves to be maintained by a
bank as per the guidelines of the RBI?
8. What are the advantages of computerisation in
accounting?
PART B — × 15 60 marks)
Answer any FOUR questions.
9. Explain the objectives and functions of accounting.
10. The following is the trial balance of M/s Kasturi Agencies
as on 31st March 2002. Prepare trading and profit and
loss account for the year ended 31st March, 2002 and a
balance sheet on that date
Particulars Dr. Cr.
Capital 1,00,000
Drawings 18,000
Buildings 15,000
Furniture and fittings 7,500
Motor van 25,000
Loan from Hari 12% interest 15,000
Interest paid on above 900
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Particulars Dr. Cr.
Sales 1,00,000
Purchases 75,000
Opening stock 25,000
Establishment expenses 15,000
Wages 2,000
Insurance 1,000
Commission received 4,500
Sundry debtors 28,100
Bank balance 20,000
Sundry creditors 10,000
Interest 3,000
2,32,500 2,32,500
Adjustments
The value of stock on 31st March 2002 was
Rs. 32,000
Outstanding wages Rs. 500
Prepaid insurance Rs. 300
Commission received in advance Rs. 1,300
Allow interest on capital 10%
Depreciate
Building 2½
Furniture and fittings 10%
Motor van 10%
Charge interest on drawings Rs. 500
Accrued interest Rs. 500.
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11. X and Y are equal partners in a business in which the
books are kept by single entry. The position of affairs on
1st January was as under
Liabilities Rs. Assets Rs.
Bills payable 646 Cash in hand 27
Sundry creditors 2,029 Cash at bank 220
Capital accounts Bills receivable 407
X 7,340 Sundry debtors 4,868
Y 7,340 Stock 3,285
Plant 8,018
Furniture 530
17,355 17,355
The following was the state of affairs on 31st December.
Cash in hand Rs. 40; Cash at bank Rs. 584, Debtors
Rs. 5,629, Bills receivable Rs. 684, Stock Rs. 3,673,
Creditors Rs. 2,147, Bills payable Rs. 595. The partners
had drawn Rs. 450 each and were further entitled to
interest on their capitals at per annum. It was agreed
to depreciate plant at the rate of 10% and furniture at
5%. Draw up the final accounts.
12. A Ltd. was registered with an authorised capital of
Rs. 6,00,000 in equity shares of Rs. 10 each. The following
is its trial balance on 31st March 2000.
Trial balance of Ltd
Particulars Debit balance Credit balance
Rs. Rs.
Goodwill 25,000
Cash 750
Bank 39,900
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Particulars Debit balance Credit balance
Rs. Rs.
Purchases 1,85,000
Preliminary expenses 5,000
Share capital 4,00,000
12% debentures 3,00,000
P and L A/c 26,250
Call-in-arrear 7,500
Premises 3,00,000
Plant and machinery 3,30,000
Interim dividend 30,250
Sales 4,15,000
Stock (1.4.1999) 75,000
Furniture and fixtures 16,200
Sundry debtors 87,000
Wages 84,865
General expenses 6,835
Freight and carriage 13,115
Salaries 14,500
Directors' fees 5,725
Bad debts 2,110
Debenture interest paid 18,000
Bills payable 37,000
Sundry creditors 40,000
General reserves 25,000
Provision for bad debts 3,500
12,46,750 12,46,750
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Prepare profit and loss profit and loss appropriation
a/c and balance sheet in proper form after making the
following adjustments
Depreciate plant and machinery by 15%
Write off Rs. 500 from preliminary expenses
Provide for 6 months interest on debentures
Provide for bad and doubtful debts at on sundry
debtors
Provide for income tax at 50%
Stock on 31.3.2000 was Rs. 95,000.
13. The following are the balance sheets of Raman Ltd., and
Soman Ltd., as on 31.3.2004.
Liabilities Raman
Ltd. Rs.
Soman
Ltd. Rs.
Assets Raman
Ltd. Rs.
Soman
Ltd. Rs.
Share capital
(Rs. 10 each)
15,00,000
6,00,000
Fixed assets 16,03,500 4,49,500
Securities
premium
1,50,000
15,000
Current assets
9,28,930 3,70,600
P L A/c 1,89,360 Miscellaneous
expenditure 10,000

General
reserve
4,70,000 P L A/c 96,530
debentures 2,00,000
Creditors 2,33,070 1,01,630
25,42,430 9,16,630 25,42,430 9,16,630
Bhiman Ltd., was formed to take over the businesses of
Raman Ltd., and Soman Ltd., for the agreed purchase
consideration of Rs. 19,50,000 and Rs. 4,80,000
respectively. Which is payable in the form of Rs. 100
share at par. Soman Ltd.'s debentures are to be converted
into 10% debentures of Bhiman Ltd. Amalgamation
expenses of Rs. 15,000 are to be borne by the transferee
company.
Close the books of the tranferor companies and give the
balance sheet in the transferee company's book.
Assume that the amalgamation is in the nature of
merger.
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14. Explain the various schedules to be prepared by a
commercial bank.
15. Write a note on
International accounting standards
Petty cash book
Provision for doubtful debts
Net assets method.