November' 2018 Financial Accounting Solved Question Papers , Dibrugarh University B.Com 1st Sem (Non-CBCS)

Financial Accounting Solved Question Papers November' 2018
Dibrugarh University B.Com 1st Sem

COMMERCE (General/Speciality)

Course: 103 (Financial Accounting)

The figures in the margin indicate full marks for the questions

(New Course)

Full Marks: 80

Pass Marks: 24

Time: 3 hours

1. (a) Answer in one sentence:- 1x4=4

a) What is Accounting Standard?

Ans: Accounting Standards are the policy documents or written statements issued, from time to time, by an apex expert accounting body in relation to various aspects of measurement, treatment and disclosure of accounting transactions for ensuring uniformity in accounting practices and reporting.

b) Who is a ‘Hire Vendor’?

Ans: Hire vendor is a person or entity who sells goods under hire purchase system.

c) What is ‘interdepartmental transfer’?

d) What is ‘sub-lease’?

(b) Find the correct answer from the given alternatives: 1x4=4

I. Unearned Income Account is

(i) a liability

(ii) an asset

(iii) an expense

II. The total amount to be paid by the buyer under Hire-purchase System is called

(i) cash price

(ii) market price

(iii) hire-purchase price

III. In Departmental A/c, each department is considered as a separate

(i) profit centre

(ii) cost center

(iii) business centre

IV. Royalty A/c is closed by transferring to

(i) Landlord A/c

(ii) Profit & Loss A/c

(iii) Shortworkings A/c

2. Write short notes on (any four): 4x4=16

a) International Financial Reporting Standards (IFRS)

Ans: International Financial Reporting Standards (IFRS)

IFRS is a set of international accounting standards stating how particular types of transactions and other events should be reported in financial statements. IFRS are generally principles-based standards and seek to avoid a rule-book mentality. Application of IFRS requires exercise of judgment by the preparer and the auditor in applying principles of accounting on the basis of the economic substance of transactions. IFRS are issued by the International Accounting Standards Board (IASB). IASB issued only thirteen (17) IFRS.

The goal of IFRS is to provide a global framework for how public companies prepare and disclose their financial statements. IFRS provides general guidance for the preparation of financial statements, rather than setting rules for industry-specific reporting. Having an international standard is especially important for large companies that have subsidiaries in different countries. Adopting a single set of world-wide standards will simplify accounting procedures by allowing a company to use one reporting language throughout. A single standard will also provide investors and auditors with a comprehensive view of finances.

b) Instalment Purchase System

Ans: Meaning and Definition of Installment Purchase System

Installment payment system (also called the deferred installments) is a system where the buyer is given the ownership as well as the possession of the gods at the time of signing the contract. The buyer has the facility to pay the price in installments.

According to J.B. Batliboi, Installment Purchase System is a system under there is an agreement to purchase and pay by installments, the goods which become the property of the Purchaser immediately when he receives the delivery of the same.

Features and Characteristics of Installment Payment System:

a) Under this system, there will be an outright sale of goods/assets.

b) The possession as well as the ownership is passed to the buyer right at the time of signing the contract.

c) The buyer can make the payment in installments.

d) IN case of default in payment, the seller cannot repossess the goods, but he can sue the buyer for the recovery of unpaid price.

The buyer cannot exercise the option of returning the goods and terminate the contract, unless the same becomes void or voidable under the contract act.

c) Independent Branch

Ans: Independent branches are those which act independently within the broad policies framed by the Head office in conducting their day-to-day activities. These branches keep full system of accounting. They can purchase goods from the market, supply goods to the head office, pay cash expenses from the cash realised and deposit cash in their own account.

The main features of independent branches.

a) They need not depend on the Head office for their requirements of supplies of goods. They can make purchases themselves. Of course, they can also obtain supplies of goods from the head office as and when they want.

b) They can sell goods only for cash and credit at any price they consider profitable.

c) They need not remit the money received by them from cash sales and debtors to the Head office periodically. They can retain the funds and meet their day-to-day expenses out of those funds. Finally, if they have surplus cash in their hands, they can remit the same to the Head office.

d) They keep a complete set of books for recording their transactions. So, they can prepare their own Trial Balance, Trading and Profit and Loss Account and Balance Sheet.

e) However, as they are ultimately responsible to the Head office, at the end of every financial period, they are required to submit a copy of their Trial Balance to the Head office.

d) Minimum Rent

e) Recoupment of Shortworkings

3. (a) What do you mean by basic concepts and conventions of Accounting? 2+2=4

Ans:- Accounting concepts: The term ‘concept’ is used to denote accounting postulates, i.e., basic assumptions or conditions upon which the accounting structure is based.

Accounting Conventions: Accounting conventions are common practices, which are followed in recording and presenting accounting information of a business. They are followed like customs in a society.

(b) Distinguish between Accounting Standards and Accounting Principles. 4

Ans:- Difference between Accounting Standard and Accounting Principles

Accounting Standard is the set of rules that should be applied for measurement, valuation, presentation and disclosure of a subject matter. For example, measurement of deferred tax, valuation of assets, intangibles and financial instruments etc. and presentation and disclosure of such measurements and valuations.

Accounting Principles however, are the fundamental principles providing a framework within which accounting should be done. These principles also govern the formulation of Accounting Standards. For example, Accrual accounting, Substance over legal form, Prudence etc.

Basis	Accounting Standard	Accounting Principles
1.Nature	Accounting standards are fixed in nature.	Accounting principles are flexible in nature.
2. Compulsory	Following of accounting standards is compulsory for every person.	Following of accounting principles is not compulsory.
3. Responsibility	Accounting standards creates more responsibility in accountant and auditors.	Accounting principles are less responsible.
4. Uniformity	Accounting standard are uniform rules.	Accounting principles are various.

c) Write a note on Accounting Standard Board set up in India. 6

Ans:- Accounting Standard Board

The Institute of Chartered Accountants of India (ICAI), after recognising the need to harmonies the diverse accounting policies and practices, constituted an Accounting Standards Board (ASB) on April 21, 1977. The main function of ASB is to formulate accounting standards so that such standards may be mandated by the Council of ICAI. While formulating the standards in India, ASB will take into consideration the applicable laws, customs, usages and business environment.

Objectives and function of Accounting Standard Board:

1. Primary objectives of accounting standard board are:

a) To suggest areas in which accounting standard is needed.

b) To formulate accounting standards which are to be followed while preparing financial statements.

c) To improve the reliability of financial statements.

d) To review the existing accounting standards at regular intervals and revise the same if the current business environment so demands.

e) To ease inter-firm and intra-firm comparison.

f) To harmonise different accounting policies which are used in preparation of financial reports.

2. The main function of accounting standard board is to formulate accounting standards so that such standards may be mandated by the Council of ICAI. While formulating the standards in India, ASB will take into consideration the applicable laws, customs, usages and business environment.

1. Accounting standard board also gives due importance to IASs/IFRSs issued by the International accounting standard board and tries to integrate them with Indian accounting standards.

2. Another function of accounting standard board is to promote the accounting standard and induce the concerned parties to adopt them in preparation and presentation of financial statements.

3. ASB also promotes international accounting standards in the country with a view to facilitate global harmonization of accounting standards.

(b) Following is the Trial Balance of M/s Khushbu and Neha, a partnership firm, as on 31^st March, 2018. Prepare a Trading and Profit & Loss A/c for the year ended 31^st March, 2018 and a Balance Sheet as on that date: 4+5+5=14

Trial Balance

Dr. Balances	Amount	Cr. Balances	Amount
Drawings:- Khushbu Neha	2,000 3,500	Capital A/cs : Khushbu Neha	35,000 25,000
Land and Building	36,000	Sales	92,500
Machinery	18,000	Returns Outward	1,300
Salaries and Wages	3,700	Bad Debts Reserve	800
Motor car	10,500	General Reserve	3,000
Trade Expenses	1,900	Creditors	23,000
Carriage Inward	400	Commission	1,500
Royalty	1,800
Purchases	45,300
Returns Inward	45,300
Debtors	24,600
Discount	1,000
Insurance	1,200
Opening Stock	23,800
Advertisement	3,000
Cash at Bank	2,900
	1,82,100		1,82,100

Adjustments:

(i) Closing Stock (31^st March, 2018)-Rs.36,000

(ii) Stock worth Rs. 3,000 uninsured has been destroyed by fire

(iii)Depreciate machinery by 15% and motor car by 10%

(iv) Of the debtors, Rs. 600 were bad and should be written off and Reserve for Doubtful Debts should be maintained at 5%

(v) Khushbu and Neha divides profits and losses equally

4. (a) Distinguish between Hire-purchase System and Instalment Purchase System. Mention four rights of Hire Vendor and four rights of Hire Purchaser as laid down in the Hire-purchase Act, 1972. 6+4+4=14

Ans:- Differences Between Hire Purchase System and Installment Purchase System:

Hire-Purchase System	Installment Purchase
It is a contract of hiring.	It is a contract of sale.
It is transferred by seller to buyer only after payment of all installments.	It is transferred by seller to buyer, immediately on signing the contract.
In this case, the buyer is like a bailee	In this case, the buyer is not in the position of a bailee
Such risk is on the seller.	Such risk is on the buyer.
On default of payment of any installment by the buyer, the seller can repossess the goods.	On default and payment of any installment by the buyer, seller cannot repossess the goods, but can file a suit in the court of law against the buyer for the recovery of unpaid price.
The buyer can exercise the option of return of goods.	The buyer cannot exercise the option of return of goods.
The buyer cannot dispose the goods, until the payment of last installment. If disposed, the third party buyer does not get a better title.	The buyer has the right to dispose the goods, even if all installments are not yet paid.

Rights and duties of the Hire vendor

RIGHTS OF THE HIRE VENDOR

(i) Rights of owner to terminate hire-purchase agreement for default in payment of hire or authorised act or breach of express conditions: Where a hirer makes more than one default in the payment of hire-purchase agreement then, subject to the provisions of Section 21 and after giving the hirer notice in writing of not less than-

a. One week, in a case where the hire is payable at weekly or lesser intervals; and

b. Two weeks, in any other case,

The owner shall be entitled to terminate the agreement by giving the hirer notice of termination in writing:

(ii) Rights of owner on termination: Where a hire-purchase agreement is terminated under this Act, then the owner shall be entitled to retain the hire which has already been paid and to recover the arrears of’ hire due.

Rights and duties of the Hire Purchaser

RIGHTS OF THE HIRE PURCHASER

a) Right of hirer to purchase at any time with rebate: The hirer may, at may time during the continuance of the hire-purchase agreement and after giving the owner not less than fourteen days notice in writing of his intention so to do, complete the purchase of the goods by paying or tendering to the owner the hire-purchase price or the balance thereof as reduced by the rebate.

b) Right of hirer to terminate agreement at any time: The hirer may, at Dairy time before the final payment under the hire-purchase agreement falls due, and after giving the owner not less than fourteen days’ notice in writing of his intention so to do, terminate the hire-purchase agreement.

c) Right to appropriate payments in respect of two or more agreements in such proportions as he thinks fit.

(b) A motor car was purchased on 1^st April, 2015 under Hire-purchase System. The payment was to be made Rs. 20,000 down and the balances including interest @5% p.a. were to be paid as follows:

On 31^st March, 2016	60,000
On 31^st March, 2017	77,500
On 31^st March, 2018	84,000

The buyer provided depreciation on motor car @ 15% per annum under diminishing balance method. Ascertain the cash price of the motor car and prepare (i) Hire Vendor’s A/c and (ii) Motor Car’s A/c in the books of Hire Purchaser. 6+4+4=14

5. (a) M/s Dutta Bros. has two departments A and B. Department A transfers goods to Department B at normal market price. From the followings particulars, prepare Departmental Trading and Profit & Loss A/c and a Combined Income A/c for the year ended 31^st March , 2018: 4+5+5=14

Particulars	Dept.-A	Dept.- B	General
Stock as on 1^st April, 2017	12,000	Nil	-
Purchases	2,77,000	24,000	-
Transfer of goods from Dept.-A	-	84,000	-
Purchase Return	1,000	-	-
Wages	12,000	19,200	-
Stock as on 31^st March, 2018	60,000	21,600	-
Salaries	8,000	5,000	-
Printing and Stationery	2,560	1,960	-
Plant and Machinery	-	14,400	-
Salaries (general)	-	-	18,000
Advertisement	-	-	9,600
Bank Charges	-	-	2,400
Sundry Expenses	-	-	3,600

Depreciate Plant and Machinery by 10%. The general unallocated expenses are to be apportioned between A and B departments in the ratio 3:2.

(b) What is ‘Branch A/c’? What are its main objectives? How are inter-branch transactions recorded in Branch A/c? 2+6+6=14

Ans:- Meaning of Branch

The dictionary meaning of the word branch is any subordinate division of a business, subsidiary shop, office etc. According to the provisions contained in sec2(14) of the Companies Act 2013 it would appear that a branch is any establishment carrying on either the same or substantially the same activity as that carried on by head office of the company.

A branch is a separate segment of a business. In order to increase the sales, business houses are requires to market their products over a larger territory and may generally split their business into certain divisions or parts. These various parts or divisions may be located in different part of the same city or in different cities of the same country or in different countries in the world. These are known as branches. The head office controls the activities of various branches.

Purpose or Objectives of Branch accounting

The main objectives and purpose of Branch accounting system are listed below:

a) To ascertain the profit or loss of each branch separately.

b) To ascertain financial position of each branch on a particular date.

c) To evaluate the progress and performance of each branch.

d) To have comparison of the results of a particular branch with previous year and also with the other branch of the same concern.

e) To differentiate between profit making and loss making branch so that necessary steps can be taken to improve the performance of loss making branches.

f) To help the proprietor in formulating policy to expand the business on proper lines so as to optimize the profits of the concern.

g) To allow branch managers’ commission on the basis of the profits of their branches; and

h) To generate information, which may be helpful for planning, control, and evolution of performance of each branch and for taking various managerial decisions?

i) To meet the requirements of specific enactments as all branches of company must keep the accounts for audit purposes.

Inter-Branch Transactions: Where there are number of branches, inter-branch transactions are likely to take place, e.g., cash or goods sent by one branch to another or expenses incurred by one branch on behalf of another. Such transactions are usually adjusted assuming that they were entered into under the instructions from the H.O. Suppose Kolkata branch transfers some goods to Mumbai branch under the directions of the H.O. The entries will be as follows:

In the books of Kolkata Branch:

Head Office A/c Dr

To Goods Supplied to Branch A/c

XXX

In the books of Mumbai Branch:

Goods received from Branches A/c Dr

To Head Office A/c

XXX

In the books of Head Office:

Mumbai Branch A/c Dr

To Kolkata Branch a/c

XXX

Note: Inter-branch transactions without the knowledge of head office may be passed as between the branches only in the usual manner.

6. (a) Avinash took a colliery on lease with a minimum rent of Rs. 60,000 per annum merging into a royalty of Rs. 5 per ton of coal raised with a right to recoup shortworkings within the first four years of lease. The output for first-five years was given below:

Year

Output (in tons)

Nil

6,000

10,000

14,000

16,000

Prepare Analytical Table and show the following Ledger A/cs in the books of Avinash: 2+4+4+4=14

i. Royalties A/c

ii. Shortworkings A/c

iii. Landlord’s A/c

(b) i. Why is Minimum Rent A/c opened in the books of Lessee? 4

ii. Why is minimum rent important in Royalty A/c? 4

iii. Explain the different types of royalty. 4

(Old Course)

Full Marks: 80

Pass Marks: 32

Time: 3 hours

1. (a) Fill in the blanks: 1x4=4

(i) Accounting Standard Board was set up in India in the year 1977.

(ii) Cost of goods sold on Hire-purchase is transferred to sales A/c.

(iii) In Branch Accounting, each branch has separate Profit or cost centre.

(iv) When a partner is not able to meet his liabilities, he is said to be insolvent.

(b) Write ‘True’ or ‘False’: 1x4=4

(i) Accounting Standard 6 deals with Depreciation Accounting. True

(ii) Hire-purchase is an agreement of hiring. True

(iii) Branch Stock A/c is always prepared at cost price. False

(iv) Royalty is in the nature of rent. True

2. Write short notes on (any four): 4x4=16

a) The provisions of Accounting Standard-1

b) Termination of Hire-purchase agreement

Ans: Where a hirer makes more than one default in the payment of hire-purchase agreement then, subject to the provisions of Section 21 and after giving the hirer notice in writing of not less than -

a. One week, in a case where the hire is payable at weekly or lesser intervals; and

b. Two weeks, in any other case,

The owner shall be entitled to terminate the agreement by giving the hirer notice of termination in writing.

Where a hire-purchase agreement is terminated under this Act, then the owner shall be entitled to retain the hire which has already been paid and to recover the arrears of hire due.

c) Inter-branch transactions

Ans: Inter-Branch Transactions: Where there are number of branches, inter-branch transactions are likely to take place, e.g., cash or goods sent by one branch to another or expenses incurred by one branch on behalf of another. Such transactions are usually adjusted assuming that they were entered into under the instructions from the H.O. Suppose Kolkata branch transfers some goods to Mumbai branch under the directions of the H.O. The entries will be as follows:

In the books of Kolkata Branch:

Head Office A/c Dr

To Goods Supplied to Branch A/c

XXX

In the books of Mumbai Branch:

Goods received from Branches A/c Dr

To Head Office A/c

XXX

In the books of Head Office:

Mumbai Branch A/c Dr

To Kolkata Branch a/c

XXX

Note: Inter-branch transactions without the knowledge of head office may be passed as between the branches only in the usual manner.

d) Rock rent

e) Rules of Garner vs. Murray

Ans: Insolvency of a Partner – (Rules of Garner vs. Murray)

If a partner’s capital account shows a debit balance on the dissolution of the firm, he is required to bring cash in the firm to settle his account. But if such partner is unable to satisfy his debt to the firm due to his insolvency, then his deficiency is to be borne by the solvent partners in accordance with the decision in Garner vs. Murray. According to the rules of Garner vs. Murray, in the absence of any agreement to the contrary, the deficiency of the insolvent partner’s capital account must be borne by other solvent partners in proportion to their capital which stood before the dissolution of the firm. The effect of this ruling is to make a distinction between an ordinary loss caused due to business operation and loss on account of insolvency of a partner.

Some important judgments in Garner vs. Murray case by Lord Justice Joyce was stated below:

a) Loss on realisation considered being ordinary loss and therefore to be shared by all the partners according to their profit sharing ratio.

b) Solvent partners to bring cash equal to their share of loss on realisation

c) Loss on account of deficiency of insolvent partner considered being capital loss; therefore to be shared by solvent partners according to their last agreed capital.

3. (a) What do you mean by ‘Accounting Standards’? Mention the procedure for issuing Accounting Standards. 3+9=12

Ans: ACCOUNTING STANDARDS: Accounting Standards are the policy documents or written statements issued, from time to time, by an apex expert accounting body in relation to various aspects of measurement, treatment and disclosure of accounting transactions for ensuring uniformity in accounting practices and reporting. These standards are prepared by Accounting Standard Board (ASB). Accounting Standards are formulated with a view to harmonies different accounting policies and practices in use in a country.

Procedure adopted in formulation of Accounting Standards:

The Institute of Chartered Accountants of India (ICAI), recognising the need to harmonies the diverse accounting policies and practices, constituted an Accounting Standards Board (ASB) on April 21, 1977. The main function of ASB is to formulate accounting standards so that such standards may be mandated by the Council of ICAI. While formulating the standards in India, ASB will take into consideration the applicable laws, customs, usages and business environment.

Following procedure will be adopted for formulating Accounting Standards:

a) Identification of the broad areas by the ASB for formulating the Accounting Standards.

b) Constitution of the study groups by the ASB for preparing the preliminary drafts of the proposed Accounting Standards.

c) Consideration of the preliminary draft prepared by the study group by the ASB and revision, if any, of the draft on the basis of deliberations at the ASB.

d) Circulation of the draft, so revised, among the Council members of the ICAI and 12 specified outside bodies such as Standing Conference of Public Enterprises (SCOPE), Indian Banks’ Association, Confederation of Indian Industry (CII), Securities and Exchange Board of India (SEBI), Comptroller and Auditor General of India (C& AG), and Department of Company Affairs, for comments.

e) Meeting with the representatives of specified outside bodies to ascertain their views on the draft of the proposed Accounting Standard.

f) Finalisation of the Exposure Draft of the proposed Accounting Standard on the basis of comments received and discussion with the representatives of specified outside bodies.

g) Issuance of the Exposure Draft inviting public comments.

h) Consideration of the comments received on the Exposure Draft and finalisation of the draft Accounting Standard by the ASB for submission to the Council of the ICAI for its consideration and approval for issuance.

i) Consideration of the draft Accounting Standard by the Council of the Institute, and if found necessary, modification of the draft in consultation with the ASB.

j) The Accounting Standard, so finalised, is issued under the authority of the Council.

(b) Sima and Rima share profits and losses equally. From the following Trial Balance of their business as on 31^st March, 2018 and a Balance Sheet as on that date: 3+4+5=12

Particulars

Dr. Balances

Cr. Balances

Capital:-

Sima

Rima

Current A/c:-

Sima

Rima

Land and Building (at cost)

Machinery (at cost)

Purchases (adjusted)

Sales Returns

Salaries

Wages

Rent and Taxes

Cash at Bank

Furniture

Accumulated Depreciation

Debtors

Creditors

Sales

Closing Stock

12,000

6,000

60,000

45,000

5,00,000

10,000

60,000

72,000

28,000

15,000

25,000

3,44,000

65,000

15,000

12,000

4,00,000

8,00,000

Adjustment:

In the accumulated depreciation, Land and Building-Rs.5,000;

Machinery-Rs. 6,000 and Furniture-Rs. 1,000 have been included

4. (a) Jayshree Company purchased a machine on 1^st April, 2016 on Hire-purchase system. The payments were to be made as follows:

On signing of the agreement

At the end of the 1^st year

At the end of the 2^nd year

At the end of the 3^rd year

5,000

6,000

3,500

2,200

16,700

Interest included in Rs. 16,700 was charged on the cash price @ 10% per annum You are required to ascertain the cash price of the machine and write up Machinery A/c and Hire Vendor’s A/c in the books of Jayshree Company. 3+4+4=11

(b) What is ‘Instalment Purchase System’? What are its features? Distinguish between Instalment Purchase System and Credit Sales. 2+3+6=11

Ans:- Meaning and Definition of Installment Purchase System

Features and Characteristics of Installment Payment System:

a) Under this system, there will be an outright sale of goods/assets.

b) The possession as well as the ownership is passed to the buyer right at the time of signing the contract.

c) The buyer can make the payment in installments.

d) IN case of default in payment, the seller cannot repossess the goods, but he can sue the buyer for the recovery of unpaid price.

e) The buyer cannot exercise the option of returning the goods and terminate the contract, unless the same becomes void or voidable under the contract act.

5. (a) What do you mean by Branch Accounting? What are its features? Distinguish between Branch Accounting and Departmental Accounting. 2+4+5=11

Ans:- Meaning of Branch and Its features

Features of Branch:

a) All branches are controlled by a central office known as head office.

b) A branch does not have a separate legal entity distinct from the head office.

c) Capital in branch is invested by the head office for acquisition of various assets.

d) Managing director /Authorised person to operate a branch and maintenance of branch accounts are normally appointed by head office.

e) Branch may dependent, independent or foreign branch.

Branch accounting and its features:

Branch accounting is the process through which the accounting system of a branch is maintained. Branch accounting system is different for dependent, independent and foreign branch.

Features of Branch Accounting:

a) Dependent branch do not maintain complete set of accounts. Accounts of dependent branch are maintained by head office.

b) Branch account is nominal in nature and it is normally prepared to find profit or loss of each branch.

c) If goods are sent at invoice price to the branch, the profit included in the amount of goods sent is eliminated while preparing branch account.

d) Independent branch keeps full system of accounting at its place.

e) Reconciliation of accounts of independent branch and foreign branch are made before finalizing the accounts of head office.

(b) The Golaghat Head Office supplies goods to its branch at Sivasagar at cost. The branch sells the goods for cash and on credit and remits the proceeds to the Head Office promptly. The branch expenses being met by the Head Office by cheque. The followings are the transactions relating to the branch for the year ended 31^st March, 2018:

Particulars

Amounts

Stock at Branch on 1^st April, 2017

Debtors at Branch on 1^st April, 2017

Goods sent to Branch during the year

Total sales at Branch

(including cash sales Rs. 2,20,000)

Goods returned by Branch

Collection from debtors

Discount allowed

Bad Debts written off

Cheque sent by Head Office towards the branch expenses:

Salaries 50,000

Rent 25,000

Petty expenses 5,000

____________

Stock at Branch on 31^st March, 2018

60,000

80,000

4,50,000

20,000

4,20,000

20,000

10,000

80,000

90,000

Prepare Branch A/c and Goods sent to Branch A/c in the books of Head Office. Also prepare Branch Debtors A/c as a part of your working note. 6+3+2=11

6. (a) i. What is Minimum Rent? Why is it important in Royalty A/c? 2+2=4

ii. What do you mean by ‘Recoupment of Shortworkings’? What conditions are to be satisfied for recoupment of shortworkings? 3+4=7

(b) Sri AmritBaruah took a colliery from Sri Amar Singh on lease for a period of 20 years from 1^st April, 2013 on a royalty of Rs. 16 per ton of coal raised with a minimum rent of Rs. 80,000 per annum and power to recoup shortworkings in the first four years of the lease.

The annual coals raised were as follows:

Year

Output (in tons)

2013-14

2014-15

2015-16

2016-17

2017-18

3000

3500

5000

8000

10000

From the above particulars, prepare in the books of Sri Amrit Baruah: 4+4+3=11

i. Royalties A/c

ii. Amar Singh’s A/c

iii. Shortworkings A/c

7. (a) In a partnership firm, Arun and Barun are sharing profits and losses in the ratio of 5:3. They decided to dissolve their firm as on 31^st March, 2018. Their Balance Sheet as on 31^st March, 2018 is given below:

Liabilities

Amount

Assets

Amount

Creditors

Loan from Arun

Loan from Barun

Capital

Arun

Barun

9,316

3,684

600

8,000

5,400

Goodwill

Furniture

Machinery

Inventory

Debtors

Cash

4,000

1,000

2,000

9,200

10,000

800

27,000

The assets were realized as follows:

Particulars

Amount

Goodwill

Furniture

Inventory

Debtors

Machinery

2,600

900

8,300

10,200

8,800

Creditors were paid Rs. 9,120 in full settlement of their claim. Realization expenses amount to Rs. 110. A bill for Rs. 130 due for sales tax was received during the course of realization and this was also paid. Close the books of the firm. 11

(b) What is Amalgamation of firms? What are its main objectives? Name the different forms of amalgamation. 2+6+3=11

***

November' 2018 Financial Accounting Solved Question Papers , Dibrugarh University B.Com 1st Sem (Non-CBCS)

Financial Accounting Solved Question Papers November' 2018
Dibrugarh University B.Com 1st Sem

Posted by Kumar Nirmal Prasad

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November' 2018 Financial Accounting Solved Question Papers , Dibrugarh University B.Com 1st Sem (Non-CBCS)

Financial Accounting Solved Question Papers November' 2018Dibrugarh University B.Com 1st Sem

Posted by Kumar Nirmal Prasad

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Financial Accounting Solved Question Papers November' 2018
Dibrugarh University B.Com 1st Sem