M.Com. DEGREE EXAMINATION, APRIL 2016
First Semester
Commerce
ADVANCED FINANCIAL ACCOUNTING
(CBCS 2012 onwards)
Time 3 Hours Maximum 75 Marks
Section A 3 15)
Answer all questions.
All questions carry equal marks.
1. What is Going concern concept?
2. Explain accounting standards as to depreciation.
3. Differentiate between dissolution and liquidation.
4. An asset is purchased for Rs. 25,000. Depreciation is to be
provided annually according to the straight line method.
The useful life of the asset is 10 years and the residual
value is Rs. 500. Find out the rate of depreciation and
prepare asset account for 3 years.
5. Explain the usual bases of apportionment of various joint
expenses.
Sub. Code
611101
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Section B 10 50)
Answer all questions, choosing either or
All questions carry equal marks.
6. A company purchased a second hand plant for
Rs. 30,000. It immediately spent on it Rs. 5,000. The
plant was put to use on 1.1.1996. After having used
it for 6 years it was sold for Rs. 15,000. You are
required to prepare the plant account for all the
six years, providing depreciation at 10% p.a on
original cost.
Or
On April 1995, Samkar purchased a T.V.S. champ
on hire purchase system from Saravanan. The cash
price was Rs. 14,900 Rs. 4,000 was to be paid on
delivery and the balance in three instalments of
Rs. 4,000 each at the end of each year. Saravanan
charged interest at p.a., Shankar depreciates
the asset at 10% p.a. On the diminishing balance
method. Pass necessary journal entries for 1995-96
only.
7. Explain the various accounting conventions.
Or
How will you show the items relating to bad debts,
provision for doubtful debts and debtors in the final
accounts of a trader from the following figures given
in the trial balance.
Debtors Rs. 1,02,000; Bad debts Rs. 5,000;
Provision for doubtful debts Rs. 6,000.
Provide further bad debts of Rs. 2,000 and
make a provision for doubtful debts at on
Sundry debtors.
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Debtors Rs. 1,02,000; Bad debts Rs. 1,000; Old
provision for doubtful debts Rs. 6,000.
Provide further bad debts of Rs. 2,000 and
make a provision for doubtful debts at on
sundry debtors.
8. From the following particulars. prepare branch
account showing the profit or loss of the branch
Opening stock at the branch Rs. 30,000
Goods sent to branch Rs. 90,000
Sales (cash) Rs. 1,20,000
Expenses
Salaries Rs. 10,000
Other expenses Rs. 4,000
Closing stock could not be ascertained, but it is
known that the branch usually sells at cost plus
20%. The branch manager is entitled to a
commission of on the profit of the branch before
charging such commission.
Or
The trading and profit and loss a/c of a concern
having three departments is as follows for the year
ending 31.3.2003. Prepare Departmental Trading
a/c.
Purchases Rs. Sales Rs.
Televisions 1,40,700 Television 1,50,000
Radios 90,600 Radios 1,00,000
Spare parts for services 64,400 Receipt for servicing 25,000
Salaries and wages 48,000 Closing stock
Rent 10,800 Television 60,100
Sundry expenses 11,000 Radios 20,300
Profit 34,500 Spare parts 44,600
4,00,000 4,00,000
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9. Sita Raman, a trader, does not keep proper books of
accounts. However, he provides the following
particulars
31.12.2001
Rs.
31.12.2002
Rs.
Cash at bank 4,500 3,000
Cash in hand 300 4,000
Stock in trade 40,000 45,000
Debtors 12,000 20,000
Equipment 5,000 5,000
Creditors 30,000 20,000
Furniture 4,000 4,000
During the year 2002, Sita Raman introduced
Rs. 6,000 as additional capital and withdrew
Rs. 4,000 as drawings. Write off depreciation on
furniture at 10% and on equipment at 5%.
Prepare a statement showing the profit or loss made
by him for the year ended 31.12.2002.
Or
A and B are partners sharing profits in 2:1 ratio. On
1st Jan 2003, they agree to admit C as a partner.
C agreeing to contribute Rs. 50,000 as his capital.
B and C agree to share profits and losses in the
ratio of respectively the balance sheet of A and
B on Dec. 31, 2002 was as under
Liabilities Rs. Assets Rs.
Sundry creditors 50,000 Cash at bank 6,250
capital 62,500 Stock on hand 50,000
capital 37,500 Debtors 31,250
Plant 25,000
Premises 37,500
1,50,000 1,50,000
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They agree to value the assets as follows
Stock on hand Rs. 45,000, Plant Rs. 18,000,
Premises Rs. 50,000, a provision of for doubtful
debts is to be maintained. C agrees to transfer
Rs. 15,000 to capital for goodwill from his
capital account.
Pass journal entries and prepare revised balance
sheet.
10. R were partners in a firm sharing profits and
losses as 6
1
2
1
3
1 respectively. The balance sheet as
on 31.12.02 was as follows:
Liabilities Assets
Sundry creditors 35,000 Buildings 50,000
Loan payable 15,000 Machinery 40,000
Reserve fund 16,000 Furniture 10,000
Capital Stock 25,000
P 30,000 Debtors 18,000
Q 40,000 Reserve 500 17,500
R 25,000 Cash in hand 8,500
1,51,000 1,51,000
R retires on 31.12.02 subject to the following
conditions.
A goodwill account is created in the books at
Rs. 24,000
Machinery to be depreciated by 10%
Furniture to be depreciated by
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Stock to be appreciated by 15% and factory
building by 10%
Reserve for doubtful debts to be raised to
Rs. 2,000.
Prepare necessary ledger accounts and show
the balance sheet of the new firm.
Or
Explain accounting standards as to: Inventories and
borrowing costs.
Section C 10 10)
Compulsory question.
11. Achyut, Bharat and Patwardhan are carrying on
partnership business as equal partners. On 31st Dec 1990
Patwardhan dies and the capitals of the Partners after
necessary adjustments stood at Rs. 20,000; Rs. 30,000
and Rs. 50,000 respectively. Achyut and Bharat could
settle the account of the executors of Patwardhan only on
31st March 1991 by which time the partnership made a
profit of Rs. 9,000. As there was no contract regarding the
share to be given in the subsequent profits made by the
firm; the executors wanted to exercise option available
under Sec. 37 of the Partnership Act. Determine the
amount payable to the executors.