LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – CORPORATE SECRETARYSHIP

FIRST SEMESTER – NOVEMBER 2019
UBC 1501 – FINANCIAL ACCOUNTING

Date: 30-10-2019 Dept. No. Max. : 100 Marks

Time: 09:00-12:00
SECTION - A
Answer ALL the questions: (10 x 2 = 20 marks)
1. What is “Repossessed Stock”?
2. State any two features of Dependent branches.
3. What is an Accounting Standard ?
4. Write short notes on “Average clause”.
5. What are the objectives of depreciation. ?
6. How do you allocate the following expenses in departmental accounts
a) Lighting b) Power c) Labour Expenses d) Depreciation
7. Compute Opening branch debtors from the following transactions.
Cash received from Debtors 37,900
Branch Debtors (Closing) 7,200
Credit Sales 40,400
8. A fire occurred on September 30,2015 in the godown of Mr. Anand. From the following figures, ascertain
the claim to be lodged:
Rs.
Stock on January 1 2015 17,000
Purchases from January 1 2015 to date of fire 1,30,000
Wages and other manufacturing expenses 17,000
Sales from January 1, 2015, to the date of fire 2,00,000
The rate of gross profit is 25% on cost.
9. Ascertain cost of goods sold from the following :
Rs. Rs.
Opening stock 17,000 Indirect expenses 10,400
Purchases 61,400 Closing stock 18,000
Direct expenses 9,600

10. On 1st January, Mohan purchased a machine on Hire purchase under a Hire Purchase Agreement which
provided for an initial payment of Rs.20,000 and the balance in 3 annual instalment of Rs.20,000 each, price
of the machine is Rs.60,000. Calculate the amount of interest included in each instalment.

SECTION – B
Answer any FOUR questions: (4 x 10 = 40 marks)
11. A Second hand machine was purchase on 1-1-2000 for Rs.30,000 and repair charge amounted to Rs.6,000.
It was installed at a cost of Rs.4,000. On 1st July 2001, another machine was purchased for Rs.26,000. On 1st
July 2002 the first machine was sold for Rs.30,000. On the same day, one more machine was bought for
Rs.25,000. On 31-12-2002, the machine bought on 1st July 2001 was sold for Rs23,000. Accounts are closed
every year on 31st December. Depreciation is written off at 15% per annum on diminishing balance method.
Prepare the Machinery A/c for 3 years ending 31-12-2002.

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12. Explain the meaning, merits and demerits of written down value method.

13. From the following particulars, prepare Income and Expenditure A/c of the Central sports society for the
twelve months from April 2012 (date of inception) to march 31, 2013.
particulars Received or Outstanding on
Paid March 31, 2013.
Rs. Rs.
Subscription from members 4,600 -
Subscription from affiliated societies 1,400 200
Life Subscriptions (10years) 2,000 -
Gifts received 3,000 -
Interest received 160 -
Committee Expenditure :
Executive 1,500 200
Planning 1,440 640
Tournament 420 120
Printing, Postage & Stationery 1,140 160
Office furniture 2,000 -
Investment purchased 3,000 -

14. A head office in Salem has a branch at Karur to which goods are invoiced by the head Office at Cost Price
plus 25%. All cash received by the branch is daily remitted to the head office. All expenses are paid from
Salem. From the following particulars show how the branch account will appear in the head office books.
Rs. Rs.
st
Stock on 1 Jan Cheques received
(invoice price) 12,500 from Salem :
st
Debtors 1 Jan. 12,000 Wages and Salaries 11,000
Goods invoiced from Salem 40,000 Rent 3,000
Remittance to Salem : Sundry Expenses 510 14,510
st
Cash Sales 16,000 Stock on 31 December,
Cash received (invoice price) 15,000
st
From Debtors 29,000 45,000 Debtors on 31
December 22,500

15. A fire occurred in the business premises of Raja on 19.7.2013. From the following particulars ascertain the
loss of stock and prepare a claim for insurance.
Rs.
Stock on 1.1.2012 36,720
Stock on 31.12.2012 32,400
Sales for 2012 2,16,000
Purchases for 2012 1,46,400
Purchases from 1.1.2013 to 19.7.2013 1,76,400
Sales from 1.1.2013 to 19.7.2013 1,80,000
The stocks were always valued at 90% of cost. The stock saved from fire was worth Rs.21,600. The
amount of the policy was Rs.75,600. There was an average clause in the policy.

16. Distinguish between Hire purchase system and Instalment system

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17. Trading and profit & loss account of Janaki Radio and Gramophone Equipment Co., for the six months
ended 31-3-2013 is presented to you in the following form.
Purchases Rs. Sales Rs.
Radios (A) 1,40,700 Radios (A) 1,50,000
Gramophones (B) 90,600 Gramophones (B) 1,00,000
Spare parts (C) 64,400 Spare parts ( C ) 25,000
Salaries and wages 48,000 Stock as on 31-3-2013
Rent 10,800 Radios (A) 60,100
Sundry Expenses 11,000 Gramophones 20,300
Profit 34,500 Spare parts ( C ) 44,600
4,00,000 4,00,000
Prepare Departmental Accounts for each of the three departments, A, B and C mentioned above after
taking into account the following:
(i) Radios and Gramophones are sold at the show room and spare parts at work shop.
(ii) Salaries and wages comprise as follows:
Show rooms ¾ and work shop ¼
It was decided to allocate the show room salaries and wages in the ratio of 1:2 between the
departments A and B.
(iii) The work shop rent is Rs.500 per month. The rent of showroom is to be divided equally between
the departments A and B.
(iv) Sundry expenses are to be allocated on the basis of the turnover of each department.

SECTION – C
Answer any TWO questions: (2 x 20 = 40 marks)
18. The following is the Receipts and Payments account of Kandan Recreation club for the year ended 31st
March 2002.
Receipts Rs. Payments Rs.
To Balance b/d 7,000 By Salaries 28,000
To Subscriptions : By General Expenses 6,000
2000-2001 5,000 By Electricity 4,000
2001-2002 20,000 By Books purchased 10,000
2002-2003 4,000 By Periodicals purchased 8,000
29,000 By Loan Repaid 20,000
To Rent for use of By Balance c/d 4,000
Conference room 14,000
To Receipts from
Entertainment facilities 28,000
To Sale of old magazines 2,000
80,000 80,000
Additional Date:
(i) The club has 50 members, each paying Rs.500 PA as subscription.
(ii) Subscriptions outstanding on 31-3-2002 Rs.6,000
(iii) Salaries outstanding Rs.2,000. Salaries paid include Rs.6,000 for 2000-01.
(iv) On 1-4-2001, the clubs properties were : Building Rs.2,00,000 Furniture & Fittings Rs.20,000 and
Books Rs.20,000.
(v) Provide 10% Depreciation on Buildings and Furniture.

Prepare Income and Expenditure Account for the year ending 31-3- 2002 and a Balance sheet on that
date.

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19. A Bombay head office sells goods to Chennai branch at 25% profit over cost. From the following details,
prepare the necessary ledger accounts in the books of head office under stock and debtors system.
Rs.
Opening stock of goods at branch at invoice price 20,000
Goods sent to branch at invoice price 90,000
Loss of goods in transit at invoice price 6,000
Pilferage at branch at the cost of branch 1,200
Closing stock at branch at its cost to branch 16,000
Sales at branch 1,05,000
Salaries and wages at branch 6,000
Other expenses at branch 3,000
Madras branch received Rs.4,000 from the insurance company in settlement of the claim for the loss of goods in transit.
20. Prepare Trading, Profit & Loss A/c and Balance Sheet from the following Trial Balance of Mr. Madan for
the year ended 31.12.2012
Debit Balances Rs. Credit Balances Rs.______
Sundry Debtors 92,000 Madan’s Capital 70,000
Plant & Machinery 20,000 Purchase Returns 2,600
Interest 430 Sales 2,50,000
Rent, Rates, Taxes, & Insurance 5,600 Sundry Creditors 60,000
Conveyance charges 1,320 Bank Overdraft 20,000
Wages 7,000
Sales Returns 5,400
Purchases 1,50,000
Opening Stock 60,000
Madan’s Drawings 22,000
Trade Expenses 1,350
Salaries 11,200
Advertising 840
Discount 600
Bad debts 800
Business premises 12,000
Furniture & Fixtures 10,000
Cash in hand 2,060 -----------
4,02,600 4,02,600
Adjustments:
(i) Stock on hand on 31-12-2012 Rs.90,000.
(ii) Provide depreciation on premises at 2.5%; Plant & Machinery at 7.5% and furniture & fixtures at 10%.
(iii) Write off Rs.800 as further bad debts.
(iv) Provide for doubtful debts at 5% on sundry debtors.
(v) Outstanding rent was Rs.500 and outstanding wages Rs.400.
(vi) Prepaid insurance Rs.300 and prepaid salaries Rs.700.
21. On 1.1.2012 National Transport Company purchased from Metro Motors five trucks costing Rs.40,000 each
on the hire purchase system. It was agreed that Rs.50,000 should be paid immediately and the balance in
three instalments of Rs.60,000 each at the end of each year. The Metro Motors charges interest @ 10%p.a.
The buyer depreciates trucks at 20% p.a. on the diminishing balance Methods. The buyer paid cash down and
two instalments but failed to pay the last instalment. Consequently, the Metro Motors repossessed three
trucks leaving two trucks with the buyer and adjusting the value of 3 trucks against the amount due. The
trucks repossessed were valued on the basis of 30% depreciation p.a. on the written down value. The trucks
repossessed were sold by Metro Motors for Rs.60,000 after necessary repairs amounting to Rs.10,000. Open
the necessary ledger accounts in the books of both the parties.

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