TDC FACC 3 (DE)
2016
(July)
COMMERCE
Paper: 103
(Financial Accounting)
Full Marks: 90
Time: 3 hours
The figures in the margin indicate full marks for the questions
1. (a) Write whether the following transaction are ‘True’ of ‘False’: 1x5=5
- Hire Purchase transactions are controlled by the Hire Purchase Act of 1982.
- Revenue is generally recognized at the point of sale.
- Royalty paid on sales is debited to Profit & Loss Account.
- On dissolution of a partnership firm, Cash in Hand is transferred to Capital Account.
- Government Accounting is basically budget oriented.
(b) Fill in the blanks: 1x5=5
- Subscription received in advance is a/an ____.
- Cost of goods sold on Hire Purchase is transferred to ____ Account.
- The lessee cannot sub-lease the leased property without the permission of the ____.
- Government Accounts are maintained on ____ basis.
- Section ____ of the Indian Partnership Act, 1932 defines a partnership.
2. Write short notes on: (any five) 4x5=20
- Cash-in-transit.
- Inter-departmental transactions.
- Termination of Hire Purchase Agreement.
- Commercial Accounting.
- Receipts and Payments Account.
- Commercial Goodwill.
3. From the following Receipts and Payment Account and the information given below, prepare an Income and Expenditure Account of Mahabahu Club for the year ended 31st March, 2016 and a Balance Sheet as on that date:
Receipts | Rs. | Payments | Rs. |
Balance b/d Entrance Fees Subscription: 2014-15 600 2015-16 50,800 2016-17 900 Locker Rent Special Subscription to govt. party | 1,900 2,650 52,300 2,500 12,350 | Rent Printing and Stationery Wages Table Tennis Board Electric Bill Interest Balance c/d | 16,600 9,200 16,900 12,500 2,400 4,600 9,500 |
71,700 | 71,700 |
Locker Rent Rs. 180 relates to 2014-15 and Rs. 270 is outstanding, Rent Rs. 3,900 has been paid for 2014-15 and Rs. 3,900 is outstanding. Printing and Stationery Rs. 936 relates to 2014-15 and Rs. 1,092 is yet to be paid. Subscription unpaid for 2015-16, Rs. 2,604 and special subscription for Governor’s Party is outstanding Rs. 1,650. Sports materials of the value of Rs. 48,000 were owned by the club on 1st April, 2015. This was valued at Rs. 40,500 on 31st March, 2016. 8+4=12
Or
(b) Define ‘Single Entry system’. What are its features? Explain the steps to be taken to convert the Single Entry System into Double Entry system. 3+3+6=12
4. (a) A motor car was purchased on 1st January, 2013 under Hire Purchase system. The payment was to be made Rs. 20,000 down and the balance including interest @ 5% p.a. was as follows:
Rs. | |
At the end of 2013 At the end of 2014 At the end of 2015 | 60,000 77,500 84,000 |
Ascertain the Cash price of the motor car and prepare Hire Vendor’s Account in books of Hire Purchaser. 6+6
Or
(b) What are the differences between Hire Purchase System of sale and ordinary credit sale? Should depreciation on assets be provided for under Hire Purchase system? Discuss.
5. (a) X, Y and Z are partners in the partnership firm sharing profits and losses as 1/2, 1/3, and 1/6 respectively. The Balance Sheet of the firm as on 31st March, 2016 was as follows:
Balance Sheet
Liabilities | Rs. | Assets | Rs. |
Capital: (Rs.) X: 80,000 Y: 60,000 Z: 50,000 Reserve Fund Sundry Creditors Bills Payable | 1,90,000 24,000 40,000 20,000 | Buildings Furniture Plant Stock Debtors 32,000 Less: Reserve for b/d 1,000 Cash in hand | 90,000 16,000 70,000 50,000 31,000 17,000 |
2,74,000 | 2,74,000 |
Z retires on that date subject to the following adjustments:
- A goodwill account is to be raised in the books at Rs. 36,000.
- Plant and Furniture are to be depreciated by 10% and 20% respectively.
- Buildings and Stock are to be appreciated by 10% and 20% respectively.
- Reserve for Bad debts is to be raised to Rs. 3,900.
Pass Journal Entries to give effect to the above arrangements and prepare the Balance Sheet of the firm after Z’s retirement. 8+4=12
Or
(b) Ram and Hari are partners of a partnership firm. The following is the Balance Sheet of the firm as on 31st March, 2016. They share profits and losses in the ratio of 2:1.
Liabilities | Rs. | Assets | Rs. |
Ram’s Capital Hari’s Capital General Reserve Sundry Creditors | 40,000 30,000 24,000 16,000 | Land and Building Furniture Stock Debtors Cash Profit & Loss A/c | 20,000 6,000 12,000 60,000 6,000 6,000 |
1,10,000 | 1,10,000 |
They admit Shyam into the firm upon the following conditions:
- Shyam will bring in Rs. 21,000 of which Rs. 9,000 will be treated as premium for goodwill to be retained in the business.
- Shyam will be entitled to 1/4th share of the profits of the firm.
- Depreciation is to be provided on furniture @ 5%.
- Stock is to be revalued at Rs. 10,500.
Show Journal Entries giving effect to the aforesaid transactions and prepare the opening Balance Sheet of the new partnership. 7+5=12
6. (a) (i) Distinguish between Branch and Departmental Accounts. 4
(ii) How are the inter-departmental transactions recorded in Departmental Accounts? 3
(iii) Explain the basis of allocation of common expenses over the various departments in Departmental Accounts. 5
Or
(b) Arun obtained from Barun a coal mine on lease for five years from 1st April, 2011 on the following terms:
- Royalty is to be paid @ 2 per ton of coal produced.
- Minimum Rent is Rs. 3,000 per year.
- If there is any cessation of work due to strike, the minimum rent may be reduced proportionately with regard to the length of the stoppage.
- Each year’s short-working can be recouped during the subsequent two years.
Production during the first five years was as follows:
Year | Production (in ton) |
2011-12 2012-13 2013-14 2014-15 2015-16 | 1,000 1,500 1,800 1,200 1,300 |
During the year 2014-15, there was a stoppage due to strike lasting for 3 months. 4+4+4=12
From the above particulars, prepare (i) Royalties Account; (ii) Shortworkings Account and (iii) Barun’s Account in the books of Arun.
7. (a) Discuss in details the basic principles of Government Accounting. 12
Or
(b) What do you mean by Government Accounting? Distinguish between Government Accounting and Commercial Accounting. 3+9=12