2013
FINANCIAL ACCOUNTING-I
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate full marks for the questions)
1. Give the meaning of the following: 1x10=10
a) Annual financial statement.
b) Accounting concept.
c) Liabilities’.
d) Sectional balancing ledger.
e) Hire charge.
f) Default by hire purchaser.
g) Right of lien of hire vendor.
h) Minimum rent in royalty account.
i) Patent royalty.
2. Write the answer very briefly: 2x5=10
a) Mention two roles of accounting principles in preparation of financial statement.
b) Write the two defects of sectional balancing ledger.
c) State the two essential features of self balancing ledger.
d) Mention in brief the distinctions between ‘repossession’ and ‘partial repossession’.
e) Write the significance of royalty suspense account.
3. Write the answer of the following briefly: 5x4=20
(a) “The limitation of Financial Accounting has limited its application in decision making.” – Give your remark on this statement.
Or
“Accounting is the language of business” – Give your opinion in this regard.
(b) Mention the essential features of self balancing ledger system.
Or
How does sectional balancing ledger help in internal check system?
(c) What is full cash price method in Hire Purchase? – Write a brief note.
Or
Asian product limited purchased machinery on installment basis from Hari Kausik Enterprise on the following terms:
1) Cash down payment at the time of signing the agreement on 1.1.2008 was Rs. 10,811.
2) Five annual installments of Rs. 7,700, the first to commence at the end of twelve months from the date of cash down payment.
3) Interest at 10% p.a. is charged by the seller.
4) Depreciation at 20% p.a. on machinery was written off as per diminishing value method.
5) Machinery was sold for Rs. 15,000 on the completion of payment of installments.
6) Accounting year ended on 31st December in each year.
Calculate the cash price of the machine.
(d) Write in short the accounting system of sublease under Royalty Account.
Or
LMN Co. Ltd. is engaged in the manufacturing of magnifying glasses. The Co. leased a machine from ABC Ltd. on 1.1.2008 for the purpose.
The terms of the lease are as follows:
1) The lessee should pay Rs. 5 for every magnifying glass produced.
2) The minimum rent shall be Rs. 10,000 p.a.
3) The lessee may recover any shortworking in the first year of operation out of the excess working in the next two following years shortworking in the second or subsequent years may be recovered out of any excess in the year next following that in which the shortworking arose.
4) The royalty are payable on 31st December of each year.
Details of magnifying glass produced are
Year
|
2008
|
2009
|
2010
|
2011
|
2012
|
Units
|
1,600
|
1,900
|
2,460
|
1,840
|
2,720
|
You are required to calculate shortworking.
4. Name the different parties interested in accounting information and explain why they need it. 10
Or
Write the basic features of accounting principles and state the accounting principle substance over legal form. 6+4=10
5. Shri Ganesh Enterprise has three ledgers in use – a Debtor Ledger, a Creditor Ledger and a Nominal Ledger which are kept of self balancing system. From the following particulars, prepare Debtors’ Ledger Adjustment A/c and Creditors’ Ledger Adjustment A/c as would appear in the Nominal Ledger for the months of March’ 2013. 10
Rs.
| |
Balance of Sundry Creditors as on 1.3.2013
Balance of Sundry Debtors as on 1.3.2013
Credit Purchases
Bills Receivables from Customers
Return Outward
Allowance received
Credit sales 1,00,000
Interest on Customer’s Account Overdue for payment
Collection from Debtors
Sales Return
Credit balances transferred from Purchase Ledger to Sales ledger
Cash Sales
Bills Receivable Dishonoured
Paid to Creditors
Bills Payable accepted
Allowance to Customers
Bad Debt Written Off
Debit Balance transferred from
Debtor’s Ledger to Creditor’s Ledger
|
7,720
5,500
80,000
5,000
100
800
700
58,000
1,200
150
4,000
1,400
26,000
4,000
20
120
500
|
Or
The following is a summary of the transaction of Puja Enterprise for the month of September 2013.
Rs.
| |
Balance of Control account on August 31, 2013 – Debtors
Balance of Control account on August 31, 2013 – Creditors
Sales as per sales book
Return inward
Purchases as per purchase Book
Return Outward
Cash received from Debtors
Cash paid to Creditors
Discount allowed by Creditors
Discount allowed to Debtors
Bills receivable received from Debtors
Bills receivable dishonoured
Noting Charges charged to debtor
Bad debts written off
Bills accepted
Bill receivable (Not Dishonoured) endorsed to creditors
Debts due from debtors set off against the amount owing to them as creditors
Provision made for bad and doubtful debts
Provision made for discount on Debtors
|
62,400
36,800
58,600
2,200
29,600
860
57,430
32,200
230
1,080
2,600
620
10
1,680
2,480
500
590
2,500
270
|
You are required to make
a) Total Debtors A/c and
b) Total Creditors A/c. 5+5=10
6. On 1st January’ 2010 Mainul acquired furniture on the hire purchase system from Samiran Product Ltd., agreeing to pay four semiannual installments of Rs. 800 each, commencing on 30th June 2010. The cash price of the item was Rs. 3,010 and an interest of 5% p.a. was chargeable.
On 30th September’ 2010, Mainul expressed his inability to continue and Samiran Product Ltd. seized the property. It was agreed that Mainul would pay the due proportion of the installment upto the date of seizure and also a further sum of Rs. 200 towards depreciation. At the Time of repossession, Samiran Product Ltd. valued the furniture at Rs. 1,500.
The Company after incurring Rs. 200 towards repairs of the furniture sold the items for Rs. 1,800 n15th October, 2010.
Show Hire Purchase Sale A/c. Mainul A/c (Hire Purchaser) and Goods Repossessed A/c in the book of Samiran Product Ltd. 2+4+4=10
Or
Emon Motor Service Co. purchased a motor car on installment payment system from Sunny Motor Ltd. on 1.1.2008 under which payment was to be made on December 31 for 4 years @ Rs. 50,000 p.a., interest being calculated at 5% p.a. The cash down price of the car was Rs. 1,77,300. Depreciate the car at 10% p.a. on the Diminishing Balance Method. Write up the Motor Car Account and Vendor A/c in the book of Emon Motor Service Co. over the first four year. 5+5=10
7. On 1.1.2008 Hiren acquired on lease from Mr. Anil, certain mica fields at a minimum rent Rs. 48,000 p.a. merging into a royalty of 1 per ton of mica ore raised. The shortworking were recovered in the next two years of such shortworking only, but on condition that if full shortworking could not be recovered in the next year, Hiren would lose his right to recover 50% of the unrecovered balance of shortworking.
The outputs of the first four years were (figures in tons):
2008
2009
2010
2011
|
12,000
30,000
60,000
56,000
|
Prepare shortworking A/c and Mr. Anil A/c (Landlord A/c) in the book of Hiren. 5+5=10
Or
Pragati Co. Ltd. holds a lease of coal mine from Usha Ltd. at a royalty of Rs. 2 per ton of coal produced with a minimum rent of Rs. 4,000 p.a. the shortworking being recoverable out of the royalties of the next two years.
After working in the mine for two years Pragati Co. Ltd. sublets parts of the mine to M Ltd. at a royalty of Rs. 2.50 per ton with a minimum rent of Rs. 2,000 per annum. M Ltd. has right to recover shortworking during the first three years of the sub-lease.
Annual Production (In tones)
2008
|
2009
|
2010
|
2011
|
2012
| |
Pragati Co. Ltd.
|
1200
|
1400
|
1900
|
2000
|
2000
|
M. Ltd.
|
-
|
-
|
700
|
800
|
900
|
Calculate shortworking royalties receivable and payable by Pragati Co. Ltd. 10
-000-
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