Saturday, June 03, 2017

IGNOU Solved Question Papers: ECO - 14 (December' 2011)

BACHELOR'S DEGREE PROGRAMME
Term-End Examination December, 2011
ELECTIVE COURSE: COMMERCE ECO-14: ACCOUNTANCY-II
Time: 2 hours Maximum Marks: 50
Note: Attempt any four questions including question no. 1 which is compulsory.
1. Attempt any two of the following questions 7, 7
(a)Explain the three systems of maintaining accounts of a dependent branch by the head office.
(b)Distinguish between fixed and fluctuating capitals of partners and list the items that usually appear on the debit and credit sides of a partner's current account.
(c)State the legal provisions relating to issue of shares at a discount and its accounting treatment in the books of a company.
(d)What is profit prior to incorporation and how is it calculated?
2. PQR Ltd. sold a machine to RST Ltd. on 12 April 1, 2007 under a hire-purchase agreement. The payments were to be made in four annual instalments of Rs. 84,600 each at the end of each year which is inclusive of interest at 5% per annum. RST Ltd. paid two instalments on time but defaulted at the time of third instalment and PQR Ltd. repossessed the machinery. Calculate the cash price and prepare necessary accounts in the books of RST Ltd. who charged depreciation at 10% per annum on written down value method?
Ans: Working Notes:

Year
Closing Balance
Amount of Instalment
Total
Interest ( 5/105 )
Opening Balance
4
3
2
1
Nil
80,571
1,57,306
2,30,387
84,600
84,600
84,600
84,600
84,600
1,65,171
2,41,906
3,14,987
84,600 x 5/105= 4029
1,65,171x5/105= 7,865
2,41,906x5/105=11,519
3,14,987x5/105=14,994
80,571
1,87,306
2,30,387
2,99,988
Required Cash Price = 2, 99,988
Ledger Amount in the Books of RST Ltd
PQR Ltd A/c
Date
Particulars
Amount
Date
Particulars
Amount
31.3.08
31.3.08
To Bank A/c (1st Instalment)
To Balance c/d
84,600
2,30,387
1.4.07
31.3.08
By Machinery a/c
By Interest a/c
2,99,988
14,999


3,14,987


3,14,987
31.3.09
31.3.09
To Bank A./c (2nd Instalment)
To Balance c/d
84,600
1,57,306
1.4.08
31.3.09
By balance b/d
By Interest A/c
2,30,387
11,519


2,41,906


2,41,906
31.3.10
To Machinery A/c
1,65,171
1.4.09
31.3.10
By balance b/d
By Interest A/c
1,57,306
7,865


1,65,171


1,65,171

Machinery A/c
Date
Particulars
Amount
Date
Particulars
Amount
1.4.07

To PQR Ltd A/c
2,99,988
31.3.08
31.3.08
By Depreciation A/c
By Balance c/d
29,999
2,69,989


2,99,988


2,99,988
1.4.08

To Balance b/d
2,69,989
31.3.09
31.3.09
By Depreciation A/c
By Balance c/d
26,999
2,42,990


2,69,989


2,69,989
1.4.09
To Balance b/d
2,42,990
31.3.10
31.3.10
31.3.10
By Depreciation A/c
By PQR Ltd A/c
By P/L A/c (Loss)
24,299
1,65,171
53,520


2,42,990


2,42,990

3. Following is the balance sheet of a partnership 12 firm of 'A' and 'B’, who shared profits in the ratio of 3: 2 respectively as on 31 March, 2010:
Liabilities
Rs.
Assets
Rs.
Creditors
Bills Payable
Mrs. A’s Loan
Reserve Fund
Capita :
A = 40,000
B = 32,000
1,52,000
60,000
40,000
20,000


72,000
Cash in hand
Stock
Debtors
Machinery
Furniture
Investments
P & L A/c
46,000
24,000
76,000
1,12,000
16,000
40,000
30,000

3,44,000

3,44,000
The firm was dissolved on March 31, 2010; A took over investments at Rs. 32,000 and agreed to pay off Mrs. A's loan. Stock realised. Rs. 20,000; Debtors Rs. 74,000; furniture Rs. 18,000; and machinery Rs. 1, 00,000. The creditors were paid at a discount of 2.5%.  B agreed to realize assets and pay off the liabilities on a remuneration of Rs. 4,400. Give journal entries for closure of the books.

Ans:
Journal Entries
In the books of the firm
Particulars
L.F.
Amount(Dr.)
Amount(Cr.)
Realisation A/c                                   Dr.
To Stock A/c
To Debtors A/c
To Machinery A/c
To Furniture A/c
To Investments A/c
(Being the sundry assets transferred to realisation account)

2,68,000


24,000
76,000
1,12,000
16,000
40,000
Creditors A/c                                      Dr.
B/P A/c                                               Dr.
Mrs. A’s Loan A/c                                Dr.
To Realisation A/c
(Being the sundry liabilities transferred to realisation account)

1,52,000
60,000
40,000




2,52,000
Reserve Fund A/c                              Dr.
To A’s Capital A/c
To B’s Capital A/c
(Being the reserve fund distributed between partners in 3:2 ratio)

20,000

12,000
8,000
A’s Capital A/c                                   Dr.
B’s Capital A/c                                   Dr.
To P/L A/c
(Being the dr. balance of p/l  distributed between partners)

18,000
12,000



30,000
A’s Capital A/c                                   Dr.
To Realisation A/c
(Being the Investments taken over by A)

32,000

32,000
Realisation A/c                                  Dr.
To A’s Capital A/c
(Being the Mrs. A’s loan taken over by A)

40,000

40,000
Cash A/c                                           Dr.
To Realisation A/c
(Being the sundry assets realised - 20,000 + 74,,800 + 18,000 + 1,00,000)

2,12,000


2,12,000

Realisation Account                         Dr.
   To Cash A/c
(Being the sundry liabilities paid off - 1,48,200 + 60,000)

2,08,200


2,08,200
Realisation A/c                                 Dr.
To B’s Capital A/c
(Being the remuneration paid to B for realisation of assets)

4,400

4,400
A’s Capital A/c                                 Dr.
B’s Capital A/c                                 Dr.
To Realisation A/c
(Being the loss on realisation distributed amongst partners)

14,760
9,840



24,600
A’s Capital A/c                                 Dr.
B’s Capital A/c                                 Dr.
To Cash A/c
(Being the final payment made to partners)

27,240
22,560


49,800

4. (a) Define fund flow statement, and state the main sources and application of funds. 8, 4
(b) State the factors that affect the goodwill of a firm.
5.The total capital employed in a company is Rs. 1,70,00,000 out of which Rs. 80,00,000 represents equity capital, Rs. 20,00,000 general reserves, Rs. 50,00,000 long term borrowings in the form of debentures and Rs. 20,00,000 bank overdraft. The current assets of the company are Rs. 85 lakh, make up of stock Rs. 30 lakh, debtors Rs. 35 lakh, advances Rs. 14 lakh and cash Rs. 6 lakh. Compute (a) Current Ratio (b) Quick Ratio and (c) Debt Equity Ratio. 4+4+4
Ans: Ans: (a) Current Ratio = Current Assets/ Current Liabilities
= 85 Lakhs/20 Lakhs
= 4.25: 1
(b) Quick ratio = Quick assets/Current Liabilities
= (85 Lakhs – 30 Lakhs)/ 20 Lakhs
= 55 Lakhs/20 Lakhs
=2.75: 1
(c) Debt Equity ratio = Debt (long term)/Equity
= 50 Lakhs/100 Lakhs
= 0.5: 1
Here, Equity = Capital + reserves = (80 + 20) = 100 Lakhs

6. (a) A Ltd. issued 5,000 14% debentures of 8, 4 Rs.100 each at a discount of 6% on January 1, 2007. The entire amount is payable on application. These debentures are redeemable at a premium of 5% on December 31, 2009. The interest is payable annually on December 31 each year and any loss on their issue is to be written off in three years. Give journal entries for the above in the books of the company for 2007, 2008 and 2009.
Ans:
Journal Entries
In the books of A Ltd
Date
Particulars
L.F.
Amount(Dr.)
Amount(Cr.)
1-1-07
Bank A/c                                         Dr.
Loss on issue of Debenture A/c
To 14% Debentures A/c
To Premium on redemption A/c
(Being the debentures issued at discount of 6% but redeemable at a premium of 5%)

4,70,000
55,000


5.00,000
25,000
31-12-07
Debenture Interest A/c                   Dr.
To Bank A/c
(Being the debenture interest paid @ 14% p.a. on debentures)

70,000

70,000
31-12-07
P/L A/c                                           Dr.
To Loss on issue of debenture A/c
To Debenture Interest A/c
(Being the debenture interest and loss on issue of debenture transferred to profit and loss account)

88,333

18,333
70,000
31-12-08
Debenture Interest A/c                   Dr.
   To Bank A/c
(Being the debenture interest paid @ 14% p.a. on debentures)

70,000

70,000
31-12-08
P/L A/c                                           Dr.
To Loss on issue of debenture A/c
To Debenture Interest A/c
((Being the debenture interest and loss on issue of debenture transferred to profit and loss account)

88,333

18,333
70,000
31-12-09
Debenture Interest A/c                   Dr.
To Bank A/c
(Being the debenture interest paid @ 14% p.a. on debentures)

70,000

70,000
31-12-09
14% Debentures A/c                      Dr.
Premium on redemption A/c           Dr.
To Bank A/c
(Being the debentures redeemed at a premium of 5%)

5,00,000
25,000


5,25,000
31-12-09
P/L A/c                                            Dr.
To Loss on issue of Debentures A/c
To Debenture Interest A/c
((Being the debenture interest and loss on issue of debenture transferred to profit and loss account)

88,334

18,334
70,000

(b) Explain the concept of unrealised profit in relation to interdepartmental transfer and its accounting treatment.

7. Draw necessary journal entries relating to issue of shares (a) at par and (b) at premium. 6+6

Labels

Absorption Costing (1) Accountancy (4) accounting for partnership firms (3) Accounting for Share Capital (3) accounts of non trading concern (3) advanced financial accounting (13) AHSEC (108) ahsec 11 (47) ahsec 12 (60) ahsec notes (104) AHSEC Question Papers (33) Assam Slet (10) bcfm (11) bills of exchange (6) branch accounting (3) Budgetary Control (3) Budgetary Control Notes (2) business communication (28) Business Environment Notes (7) business regulatory framewrok (47) Business Statistics Notes (23) cash flow statement (5) cbse 12 (19) cbse notes (27) commerce (13) company law (23) corporate accounting (33) corporate laws (14) cost accounting (63) cost and management accounting (34) cpt (36) cpt 200 (7) cpt notes (30) dibrugarh university (1084) dibrugarh university notes (569) dibrugarh university question paper (418) dibrugarh university solved papers (232) dibrugarh university syllabus (47) direct tax law (49) eco - 01 (4) ECO - 02 (2) ECO - 03 (2) ECO - 05 (6) ECO - 06 (1) ECO - 07 (1) eco - 08 (4) eco - 09 (1) ECO - 10 (2) ECO - 11 (3) ECO - 12 (7) ECO - 13 (2) ECO - 14 (4) entrepreneurship (14) fianancial accounting (3) financial accounting (48) Financial Accounting Notes (11) financial management (18) Financial statements analysis (14) funds flow statement (3) guwahati university (303) guwahati university syllabus (54) Hire Purchase (5) Human Resource Management (14) icwai (38) icwai notes (39) ignou solved assignments (83) ignou solved question papers (121) income from house property (5) income from salary (4) Income Under the head Salaries (11) information technology (10) Installment Purchase (4) issue of shares (4) kkhsou (13) M.com (63) Management Accounting Notes (25) MCQ (11) paper I (1) paper II (9) paper III (1) principle of business mangement (16) Principles of Marketing Notes (16) royalty accounts (3) sale of goods act (8) semester I (157) Semester II (155) semester III (64) semester IV (148) semester V (101) semester VI (91) slet (13) Slet Ne (10) Small Business Management (8) solved assignments (22) UGC - NET: Commerce (08) (14) UGC - NET: Commerce (08) Paper II (3) UGC - NET: Commerce (08) Paper III (14) ugcnet solved question papers (23) Variance Analysis Notes (1)