Axis College of commerce & Science
Send –Up Examination 2010
B.Com-II (PU) Time 03:00 hours
Advance Accounting Marks: 100
Q: 1 Write the short answers of the followings.
a) Define Bonus shares. g) What are preferred shares?
b) Define current ration h) Write the characteristics of hire purchase
c) What is interim dividend? system.
d) What is meant by contingent liabilities? i) What is meant by deferred cost?
e) Define work certified. j) Why the ratios of a company are
f)What is meant by dependent branch? calculated?
Q:2 Following data is related to ABC company for the year 31st December 2007:
Debit balances Amounts Credit balances Amounts
Building 175000 Issued Capital 600000
Purchases 500903 (6000 shares of 10 each)
Manufacturing Expenses 202800 General charges 250000
General charges 31078 Unclaimed dividend 6526
Machinery 200000 Trade expenses 36974
Motor vehicle 95000 Sales 938947
Furniture 15000 Depreciation Reserve 71000
Opening stock 172058 Interest on Investment 8544
Book debts 148380 Profit & Loss A/c 16848
Investments 288950 Staff provident fund 37500
Cash 72356 Creditors 45000
Director fee 18000
Interim dividend 45000
Repairs 10000
Totals 2011339 Totals 2011339
Adjustments:
1- Closing stock Rs.150214
2- Provide 20000 for depreciation on fixed assets, Rs. 6500 for manager’s commission and
Rs. 1500 for company’s contribution to staff provident fund.
3- Interest accrued on investment Rs. 5348
4- A provision of Rs.30848 is necessary for taxation.
5- Directors propose a final dividend of Rs.45000.
6- Credit sales of Rs. 1600 were left unrecorded.
Q:3 The following are the extracts from the draft balance sheet of Abdullah & Company Ltd as on 30 th
June, 2006.
Authorized capital
30000 ordinary share of 10 each Rs.300000
Issued & Subscribed Capital
20000 ordinary shares of Rs. 10 each Rs.200000
Reserved fund Rs.120000
Profit & Loss Account Rs.70000
The board of director recommended
1- To issued bonus shares in the ration of one bonus share for every four ordinary shares
held.
2- To issue right share at par in the ratio of one right share for every four ordinary share
held. The bonus shares will not be entitles for above right shares.
For the purpose of issue of bonus shares, the funds were to be provided out of profit & loss account and
reserve fund in equal proportion. All right shares were taken up.
Required: Make necessary journal entries to give effect to the recommendation of the board and show
how they would affect the balance sheet.
Q:4 Z company Ltd issued 10000 12% Debentures of Rs.100 each at Rs.105 each at on 1st July 2000.
Interest is payable half yearly i.e. on 30th June and 31st December each year. Company closes its books
on 31st December each year. On 31st December 2000, company purchases its own debenture of
Rs.100000 at par as investment. On 31December 2001 it further purchased its 1000 own debenture at
Rs.98 each.
You are required to pass the necessary journal entries in the books of the company up to 31st
December 2001.
Q: 5 Required:
1- Current ration
2- Debtor turnover ratio
3- Liquid ratio
4- Creditor turnover ratio
5- Inventory turnover ratio
6- Absolute ratio
Opening stock 23500 Sundry debtors 21000
Closing stock 26500 Cash 5000
Sales less return 126500 Bank 4000
Provision for bad debts 1000 Bills receivable 7500
Sundry creditors 16000 Provision for taxation 7500
Loose tools 2000 Marketable securities 4000
Purchases 90000 Bills payable 14500
st
Q:6 On 1 January 2001 Ehsan Trading Co. acquired a machine on hire purchase basis.
The terms of the contract were as follows.
1- Cash price of the machine was Rs.100000
2- Rs.1000 were to be paid on the signing of the contract.
3- The balance was to be paid in annual installment of Rs. 3000 plus interest.
4- Interest chargeable on the outstanding balance was 6% p.a.
Depreciation at 10% per annum is to be written off on the diminishing balance method.
Required: Prepare the Machine Account and Hire vendor account in the books of Ehsan Trading
Co. from 1st January 2001 to 31st December 2002.
Q:7 Kaka stores of Gujranwala has a branch at Sargodha. Goods are invoiced to the branch at selling,
being 20% profit on selling price. The branch keeps its own sales ledger, and deposits all cash received
daily to the credit of the Head office account, in the bank at Sargodha. All the expenses are paid by
cheque from Gujranwala. From the following particular prepare the Branch account in the Head office
books and make the necessary adjustment to arrive at the actual branch profit & loss for the year 2005.
Particular Amount Particular Amount
Stock on 1st January 2005 5000 Cash received on ledger account 13200
Stock on 31st December 2005 6000 Goods invoiced from head office 36400
Sundry debtor on 1st January 2005 2800 Rent 1600
Cash sales for the year 21600 Wages 1400
Credit sales for the year 14000 Sundry expenses (paid from head 320
Rent outstanding 160 office )
Q:8 How the company can be distinguish from partnership business?
