Gauhati University Question Papers
Financial Accounting - II (May-June’ 2012)
Full Marks: 80
Time Allowed: 3 hours
Answer either in
English or Assamese
The figures in the
margin indicate full marks for the questions
1.
Give the meaning of the following terms: 1x10=10
a) Indian
Accounting Standard.
b) International
Financial Reporting Standard.
c) Synthetic
system of Branch Accounting.
d) Inland
Branch under Branch Account.
e) Dependent
Branch under Branch Accounts.
f) Interdepartmental
Transfer under Departmental Accounts.
g) Goodwill.
h) Realisation
Accounts of Partnership firm.
i)
Insolvent partner.
j)
Conversion of partnership firm into a company.
2.
Answer the following questions very briefly: 2x5=10
a) State
two functions of International Accounting Standard Board.
b) Mention
two basic needs of Branch Accounting.
c) Mention
two methods of recording departmental transaction in Departmental Accounts.
d) Write
two factors responsible for emergence of goodwill in a business firm.
e) State
two financial consequences of insolvency of a partner.
3.
Answer the following in brief: 5x4=20
a) Define
the terms’ cash in transit’ and goods in transit’ and rite the accounting
treatment of ‘cash in transit’ and ‘goods in transit’ under debtor system of
Branch Accounts.
Or
Write the distinction between ‘Branch Debtors Account’ and
‘Memorandum Branch Debtors Account’.
b) Discuss
the process of issuing International Financial Reporting Standards (IFRS).
c) Smith
Company Limited has the following assets and liabilities:
|
|
Rs.
|
|
Goodwill
Other Fixed Assets
Current Assets
Preliminary Expenses
It’s all outstanding
liabilities amounted to
|
4,000
8,000
4,000
200
2,000
|
It
had earned an annual average profit before tax Rs. 3,000 for the last five
years.
The
company is likely to be purchased by Alfred Limited, In which case, the rent
paid by Smith Company Limited Rs. 500 p.a. will not be a charge in future.
Assuming
a normal return of 10% and tax rate at 40%, calculate the value of goodwill of
Smith Company Limited.
d) X
and Y were partners sharing profit and losses equally. On 31st
December, 2011 they decided to dissolve their partnership firm when their books
showed the following balances:
|
|
Rs.
|
|
Goodwill
Furniture
Investment
Stock
Sundry Debtor
Sundry Creditor
X’s Capital
Y’s Capital
|
10,000
9,000
28,000
47,000
32,000
45,000
35,000
46,000
|
The
Realisation expenses amounted to Rs. 2,000.
The
firm realised Rs. 37,000 from Sundry Debtors.
Furniture
and stock were sold for Rs. 4,000 and Rs. 36,000 nothing could be realised from
goodwill.
Investments
were taken over by X for Rs. 38,000.
You
are asked to prepare Realisation Account.
Or
State
in brief the five modes of Dissolution of Partnership Firm.
4.
Explain the As-1: Disclosure of Accounting Policies or AS-10: Accounting for
fixed assets prescribed by the ICAI.
10
5.
(a) On 1st April, 2011 Jorhat Limited opened a branch at Golaghat.
All goods sold at the branch are received from the head office invoiced at cost
plus 20%. 10
All
expenses relating to Branch are paid by the Head Office. All cash collections
are remitted daily to head office by the branches. The following particulars
relating to the year ended on 31st March, 2012 have been extracted
from the weekly statement sent by the branches.
|
|
Rs.
|
|
Cash sale (40% of
net sales)
Sales returns
Sundry debtors
Rent and tax
Bad debts
Cost of goods sent
to Branch
General expenses
Goods received from
H.O.
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Closing stock in
hand
Wages
|
39,300
3,650
17,250
2,000
500
60,000
1,300
70,000
4,000
17,500
9,000
|
Golaghat
Branch Account as would it appear in the books of the head office.
Or
(b) Elaborate the ‘Stock and Debtor System’ of Branch Accounting.
10
6. (a)
From the following Trial Balance extracted from the books of M/s. Nilima
Stores, prepare the departmental Trading and Profit and Loss Accounts for
account for the year ended 31st December, 2011. 5+5=10
|
Particulars
|
Debit
|
Credit
|
|
Opening Stock
Department A
Department B
Purchase and sale
Department A
Department B
Carriage Inward
Department A
Department B
Machinery
Department A
Department B
Salaries
Rent 1,200
Repairs to machinery
Debtors &
Creditors
Capital
Cash in hand
Bills receivable and
payable
Drawing
Buildings
|
10,000
8,000
18,000
15,000
400
200
2,000
1,600
6,000
3,000
4,500
1,200
1,900
2,000
6,000
|
30,000
28,000
6,000
16,000
1,000
|
|
|
81,000
|
81,000
|
Additional
information for department A and B respectively is as follows:-
1) Closing
stock on 31st December, 2011
Department A = Rs. 14,000
Department B = Rs. 12,000
2) Salary
to be allocated in the ratio of 7 : 3 and repairs to machinery in the ratio of
2 : 3
3) Area
of building is occupied in the ratio of 3 : 2.
4) Depreciate
building at 5% p.a. and machinery at 10% p.a.
Or
(b) Review the importance of valuation of goodwill for
partnership firm, company and for public sector undertaking.
7.
(a) Apu and Nipu are partners in a firm sharing profit and losses in the ratio
of 3 : 2. They decided to dissolve their firm on 31st December, 2011
when their Balance Sheet was as under: 4+2+4=10
|
Liabilities
|
Amount
|
Assets
|
Amount
|
|
Capital:
Apu
Nipu
Creditors
Profit and Loss A/c
|
17,500
10,000
2,000
4,500
|
Freehold
Property
Investment
Debtors
Stock
Bank
Cash
|
16,000
4,000
2,000
3,000
2,000
7,000
|
|
|
34,000
|
|
34,000
|
The
partners decided to dissolve the firm on the above date. Apu took over the
investment at an agreed value of Rs. 3,800. Other assets were realised as
follows:
Freehold
property Rs. 18,000
Debtors
80%
Stock
Rs. 2,800
Creditors
of the firm agreed to accept 5% less.
Expenses
on realisation of assets amounted to Rs. 400
There
was a typewriter in the firm which was bought out of the firm’s money was not
shown in the above balance sheet. The typewriter is now worth Rs. 3,000 but was
sold for Rs. 1,000. Close the firm’s Book of Accounts by preparing a
Realisation Account, Partner’s Capital Account and Bank Account.
Or
(b) Explain the procedures to be followed on dissolution in
respect of settlement of Accounts of the Partnership Firms.
***
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