Dibrugarh University - Financial Accounting 2011

1.          A summary of Receipts & Payments A/c of Duliajan Library for the year ended 31st March, 2009 is given below:
                                                           Receipts & Payments A/c
                                               For the year ended 31st March, 2009
Receipts
Rs
Payments
Rs
To Balance b/d
7,500
By Salaries to staffs
9,900
To Entrance fees
4,500
By Electricity
1,080
To Subscription
30,000
By Postage and stationery
750
To Sale of old newspapers
225
By Telephone charges
750
To Hire of Lecture Hall
3,000
By Purchase of books
9,000
To interest on investments
1,200
By  Rent
13,200


By Outstanding expenses
1,050


By Balance c/d
10,695

46,425

46,425

Prepare an Income & Expenditure A/c of the Duliajan Library for the year ended 31st March, 2009 and a Balance Sheet as on that date after taking into account the following adjustments:
(i)      Subscriptions include Rs 1,500 received in advance for 2009-10
(ii)    Provide for outstanding liabilities
a. Rent – Rs 1,200
b.Salaries – Rs 900
(iii)   Library books are to be depreciated at 10% p.a. excluding the addition made during the year.
(iv)  50% of entrance fees are to be capitalised
(v)    The library had the following assets and liabilities as on 1st April, 2008: Furniture 7,500; Library books 60,000; Investments 45,000; Cash at Bank 7,500; outstanding expenses 1,050.

Or

          What do you mean by preparation of accounts from incomplete records? Explain with example the procedure of ascertaining profits under net worth method.

2.          Mention four features of hire-purchase system. Bring out the points of distinction between hire purchase and credit sales.
Or
          X Ltd. purchased 2 (two) machines costing Rs 80,000 each from Y Ltd. on 1st January, 2007 on hire-purchase system. The terms were:
(i)         Payment on delivery Rs 20,000 for each machine
(ii)       Remainder in 3 (three) equal installments together with interest at 10% p.a. to be paid at the end of each year

X Ltd. writes off depreciation @ 25% each year on diminishing balance method.
X Ltd. paid the installments due on 31st December, 2007 and on 31st December, 2008 but could not pay the final installment.
X Ltd. repossessed 1 (one) machine adjusting its value against the amount due. The repossession was done on the basis of 30% depreciation on diminishing balance method. The vendor spent Rs 8,560 for repairing the machine and sold it for Rs 40,000.
Write up the Ledger Accounts in the books of both the parties.

3.          A and B were partners of a firm, sharing profits in the ratio of 3: 1.
                                                Balance Sheet of A and B

Liabilities
Amount (Rs.)
Assets
Amount(Rs.)
Creditors
Reserve
Capital Account:
A = 1,00,000
B =     60,000

40,000
20,000


1,60,000
Cash at Bank
Debtors                          30,600
Less: Provisions                  600
Fixed Assets
20,000

30,000
1,70,000

2,20,000

2,20,000

C is admitted on the date of the above Balance Sheet subject to the following conditions:
(i)         Fixed assets are to be depreciated by 20% except Building worth Rs 40,000 (book value) which is to be valued at Rs 60,000
(ii)       Rs 600 is to be written off as bad debts and provision for doubtful debts to be made at 4% on debtors
(iii)      The goodwill of the firm is to be valued at Rs 90,000. C is to bring in cash Rs 60,000 for capital and Rs 30,000 for his share of goodwill
(iv)     Liability for outstanding expenses Rs 4,000 to be provided
(v)       There were office equipments which were 100% depreciated to be valued at Rs 8,000 on the date of retirement. It was brought into books
(vi)     It was agreed that A, B and C will share profits equally in future
Prepare necessary Ledger Accounts and draw up the new Balance Sheet after C’s admission.
Or
          The partnership between Ram and Mohan was dissolved on 31st March, 2009. On that date, respective credits to the capitals were – Ram Rs 50,000 and Mohan Rs 30,000. And Rs 10,000 were owed by Mohan to the firm and Rs 20,000 were owed by the firm to Ram. Rs 15,000 were due to trade creditors.
          The assets of the firm realized Rs 90,000 excluding Rs 10,000 due from Mohan. Creditors were settled at book value. In addition one bill for Rs 1,000 under discount was dishonoured and had to be taken up by the firm. The expenses of realization came to Rs 1,200.
          Prepare necessary Ledger Accounts to close the books of the firm.

4.          (a) Distinguish between Branch and Departmental Accounts.
          (b) Briefly explain the treatment of the following items in Branch Account:
(i)      Cash in transit
(ii)     Goods in transit
(iii)      Inter-branch transaction
Or
          A firm has two departments – Sawmill and Furniture. Furniture is made of wood supplied by the sawmill department at its usual selling price. From the following figure, prepare Departmental Trading and Profit & Loss A/c for the year ended 31st December,2009:                                                                                                                                       

Sawmill department Rs
Furniture department Rs
Opening Stock
1,50,000
25,000
Sales
11,00,000
2,25,000
Purchase
10,00,000
7,500
Supply to Furniture Department
1,50,000

Selling Expenses
10,000
3,000
Wages

30,000
Stock on 31st December, 2009
1,00,000
30,000
The value of stock in the furniture department consists of 75% wood and 25% other expenses. The sawmill department earned gross profit at 15% in 2008. General expenses of the business as a whole came to Rs 55,000.

5.          What do you mean by Government Accounting? Distinguish between Government Accounting and Commercial Accounting.
Or
          What do you mean by Government Accounting? Discuss the basic objectives of Government Accounting. 

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