Term-End Examination: December, 2012
ECO-14: ACCOUNTANCY-II
Note: Attempt any four questions including question no. 1 which is compulsory.
1. Attempt any two of the following questions: 7, 7
(a) How are branch balances incorporated in head office books at the end of the accounting year?
(b) What do you mean by Departmental Accounts? Why are they considered necessary?
(c) Explain the provisions relating to issue of shares at a discount under Section 79 of the companies Act.
(d) What is 'Purchase Consideration’? Explain the various methods of calculating purchase consideration.
2. From the following information, calculate: 12
(a) Current Ratio
(b) Quick Ratio
(c) Debt Equity Ratio
Liabilities
|
Amount (Rs.)
|
Assets
|
Amount (Rs.)
|
Equity Capital
7% Pref. Capital
Reserves
6% Debentures
Overdraft
Creditors
|
10,00,000
3,00,000
1,50,000
8,00,000
50,000
3,00,000
|
Fixed Assets
Stock
Debtors
Bank
Cash
|
17,00,000
4,00,000
3,00,000
1,50,000
50,000
|
26,00,000
|
26,00,000
|
3. A, B and C were partners sharing profits in the ratio of 2: 2: 1 respectively. Their Balance Sheet as on December 31, 2010 is as follows: 12
Liabilities
|
Amount(Rs.)
|
Assets
|
Amount (Rs.)
|
Creditors
Reserve Fund
A’s Capital
B’s Capital
C’s Capital
|
20,000
12,000
40,000
20,000
5,000
|
Cash
Debtors
Stock
Furniture
Machinery
Goodwill
|
5,000
22,000
15,000
6,000
40,000
9,000
|
97,000
|
97,000
|
They decided to dissolve the firm. The assets realized as under: Debtors Rs.16, 000; Stock Rs.10, 000; Furniture Rs.2, 000; Machinery Rs.18, 000 Goodwill Nil. Creditors were paid off at a discount of 2%. B was entrusted with the task of realizing assets and paying of liabilities for which he was to be paid a sum of Rs. 1,600. There was an unrecorded asset in the books which was taken over by B at an agreed price of Rs. 3,400. Repairs to machinery Rs. 800 were still outstanding and were not recorded in the books. Draw up the necessary ledger accounts to close the books of the firm.
4. A Ltd. was incorporated with an authorized capital of Rs. 5 Lakh divided into shares of Rs. 10 each. The company offered for public subscription 20,000 shares at a premium of Rs. 2 per share, payable Rs. 2 on application; Rs. 5 on allotment including premium and the balance in two calls of Rs. 2.50 each. Applications for 30,000 shares were received by the company. The directors made the allotment as follows: No allotment was made to the applicants of 6,000shares and the application money was refunded. Allotment was made to the remaining applicants on pro-rata basis and money paid in excess on application being adjusted to ward allotment. All the allotees except Rahim to whom 500 shares were allotted paid the amount of both the calls on the due dates. As a result of his failure to pay the call money his shares were forfeited 300 of the forfeited shares were reissued as fully paid after the second call at Rs. 11 per share. Give journal entries to record the above transactions. 12
5. (a) Explain with example, as to how is goodwill treated when the incoming partner does not bring his share of goodwill in cash. 7, 5
(b) Journalise the following transactions:
(i) 1500 7% debentures of Rs. 200 each issued at a discount of Rs. 20 per debenture redeemable at par.
(ii) 2000 8% debentures of Rs. 250 each issued at par, redeemable at a premium of 10%.
Ans:
Journal Entries
Date
|
Particulars
|
L.F.
|
Amount(Dr.)
|
Amount(Cr.)
|
(i)
|
At the time of Issue :
Bank A/c Dr.
Discount on issue of Debenture A/c Dr.
To 7% Debentures A/c
(Being the debentures issued at discount of 10)
|
2,70,000
30,000
|
3,00,000
| |
At the time of redemption :
7% Debentures A/c Dr.
To Bank A/c
(Being the debentures redeemed at par)
|
3,00,000
|
3,00,000
| ||
(ii)
|
At the time of issue :
Bank A/c Dr.
Less on issue of Debentures A/c Dr.
To 8% Debentures A/c
To Premium on redemption A/c
(Being the debentures issued at par but redeemable at a premium of 10%)
|
5,00,000
50,000
|
5,00,000
50,000
| |
At the time of redemption :
8% Debentures A/c Dr.
Premium on redemption A/c Dr.
To Bank A/c
(Being the debentures redeemed at a premium of 10%)
|
5,00,000
50,000
|
5,50,000
|
6. State the journal entries passed to open various accounts under Stock and Debtors System as applicable to hire purchase business. Also distinguish between Stock and Debtors System and Hire Purchase Trading A/C method of ascertaining profit or loss in hire purchase transactions. 6, 6