Tuesday, July 24, 2012

Dibrugarh University - Financial Accounting (Nov' 2011)

2011 (November)
Commerce (General/Speciality)
Course: 101
Full marks: 80
Time: 3 hours
1.       (a) choose the correct answer: (1x3=3)
(i)      Accounting standard board was set up in India in the year (1965/1971/1977)
(ii)    The total amount to be paid by the buyer under hire purchase system is called (cash price/ hire-purchase price/ market price)
(iii)   Cash sent by the branch not received by the head office by the end of the year is debited to (cash-in-transit/ goods-in-transit/ arrears cash account)
(b) Fill in the blanks: (1x3=3)
(i)      The cost of goods sold on hire purchase is transferred to Trading account.
(ii)    Royalty paid on sales is debited to Profit and Loss account.
(iii)   After making payment to third parties, the Loan due to partner is paid.
(c) Write true or false: (1x2=2)
(i)      Before Garner vs. Murray decision, no distinction was made between trading loss and capital loss. True
(ii)    When firms are amalgamated, realisation accounts are prepared to close the books of such firms. False

2.       Write brief answers: (4x4=16) Click here for Answer
(a)    How are the inter-branch transactions recorded in Branch account?
(b)   What is called “Rock Rent” in Royalty?
(c)    What are the uses of setting accounting standards?
(d)   How does “Complete repossession” differ from “Partial repossession” in hire-purchase system?

3.       (a) Following is the Trial Balance of Sita and Gita as on 31st March, 2011:
Debit Balances
Amount (Rs.)
Credit Balances
Amount (Rs.)
Opening stock
Purchases
Bills receivable
Cash in hand
Bad debts
Machinery
Advertisement
Sundry Debtors
Goodwill
Land and Building
Fuel
Wages and Salaries
Rent and Taxes
Discount
Commission
Furniture
160000
400000
4000
26000
2000
132000
16000
100000
140000
450000
30000
80000
40000
17200
20000
30000
Sundry creditors
Bank loan
Sales
Bills payable
Interest
Capitals:
Sita:
Gita
150000
87200
840000
40000
10000

320000
200000

1647200

1647200

From the following additional information, you are required to prepare trading and profit and loss account for the year ended on 31st march, 2011 and a Balance sheet as on that date: (4+5+5=14)
(i)            Closing stock as on 31st march, 2011: Rs. 120000.
(ii)          Depreciate machinery by 10% and furniture by 5%.
(iii)         Create a reserve of 5% on sundry debtors for doubtful debts.
(iv)        Write off  1/4th  of advertising.
Or
(b) What are accounting standards? What procedure is adopted for formulating accounting standards? Discuss the main objectives of such standards. (3+6+5=14)   Click Here for answer

4.       Raja ram obtained a coal mine on lease from 1st April, 2007 on the following terms: (2+4+4+4=14)
(i)      Minimum Rent:  Rs. 25000 P.a.
(ii)    Each year’s short-workings can be recovered during the subsequent two years.
(iii)   The minimum rent is to be reduced by 25% in a year where there is any cessation of work due to accident or strike.
(iv)  Royalty is to be calculated @ 50p per ton.
Production during first four years was as follows:
Year                                                                                                               Quantity(in tons)
2007-08                                                                                                        30000
2008-09                                                                                                        35000
2009-10                                                                                                        60000   
2010-11 (Strike for 3 months)                                                                        40000
From the above information, prepare in the books of Raja Ram:
(a)    Minimum Rent Account
(b)   Royalties Account
(c)    Short-workings Account
(d)   Landlord’s Account

5.       (a) What is hire-purchase system? What are its important features? Distinguish between hire-purchase system and instalment-purchase system? (2+4+8=14)  Click Here for answer
Or
(b) Saraighat co. purchased from Dibrugarh Machine Mart, three machines costing Rs. 40000 each on hire-purchase system. Payment was to be made Rs. 30000 down and the remainder in three equal instalments together with interest at 5% p.a. The buyer writes off depreciation @ 20% p.a. on the Diminishing Balance method. The purchaser paid the instalment due at the end of the first year but could not pay the next. Prepare the necessary ledger accounts in the books of both the parties for two years, if the hire vendor took possession of all the three machines. The hire vendor spent Rs. 5800 on getting the machines thoroughly overhauled and sold them Rs. 70000. (4+4+4+2=14)

6.       (a) P, Q and R are partners. The following is their Balance Sheet as on 31st December, 2010, on which date they decided to dissolve their business:
Balance Sheet
As on 31st December, 2010
Liabilities
Amount (Rs.)
Assets
Amount (Rs.)
Sundry Creditors
Loan from Mrs. P
Capital Accounts:
P : 36000
Q :27000
R : 9000
39800
14000



72000
Cash
Sundry Debtors
Stock
Machinery
2300
33500
40000
50000

125800

125800
Sundry Debtors, Stock and Machinery were realised at 50% of their book values. Realisation expenses amounted to Rs. 550. P agrees to pay off his wife’s loan. R is insolvent and is unable to bring anything in respect of his debts to the firm. Prepare Realisation Account, Partner’s Capital Accounts and Cash account by applying the decision in Garner vs. Murray case.
(6+5+3=14)
Or
(b) A head office at Kolkata supplies goods to its branch at Jorhat on cost. The Branch sells the goods for cash and on credit and remits the proceeds to the Head office promptly. The Branch expenses are being met by the head office by cheque.
The following are the transactions relating to the branch for the year ended on 31st March, 2011:
Particulars
Amount (Rs.)
Stock at branch on 01-04-2010
Debtors at branch on 01-04-2010
Goods sent to branch during the year
Total sales at branch (Including cash sales: Rs. 110000)
Goods returned by branch
Goods returned by customers
Collection from debtors
Discount allowed to debtors
Bad debts written off
Cheque sent by Head Office towards branch expenses
Salaries: 25000
Rent: 14500
Petty expenses: 500
Stock at branch on 31-02-2011
30000
40000
225000
370000
10000
10000
210000
10000
5000



40000
4 5000
Prepare Jorhat Branch Account and Goods sent to Branch Account in Head office books. Show Branch Debtors account as a part of your working note. (8+4+2=14)

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