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Wednesday, February 13, 2019

Gauhati University Question Papers: Financial Accounting - II (May-June’ 2016)


Gauhati University Question Papers
Financial Accounting - II (May-June’ 2016)
Full Marks: 80
Time Allowed: 3 hours
Answer either in English or Assamese
The figures in the margin indicate full marks for the questions
1. Answer the following questions:                                          1x10=10

a)         Discount allowed to debtors is not shown in Branch Account. (State whether the statement is True or False)
b)         Revenue arising from sale of old furniture is not recognized as income as per AS-9. (State whether the statement is True or False)
c)          Depreciation Accounting as per AS-6 does not deal with
1)      Goodwill.
2)      Livestock.
3)      Mineral.
4)      All of the above.
(Choose the correct answer)
d)         In branch accounting the excess of selling price over wholesale price is considered as the profit of _____. (Fill in the blanks)
e)         Cash sent by the Branch not received by the HO is debited to _____ A/c by the year end. (Fill in the blanks)
f)          Goodwill is an asset which can be disposed off only in the event of the business being sold as a going concern. (State whether the statement is True or False)
g)         What is Departmental Accounting?
h)         Section 39 of the Indian Partnership Act, 1932 relates to
1)      Admission of partners.
2)      Insolvency of partners.
3)      Treatment of goodwill.
4)      Dissolution of partnership firm.
(Choose the correct answer)
i)           When an unrecorded asset is taken over by a partner, realization account is created. (State whether the statement is True or False)
j)           What is sliding scale method of valuation of goodwill?
2. Answer the following questions in brief:                                          2x5=10
a)         Name two items of inventories which are outside the scope of AS-2.
b)         Why is Branch Adjustment A/c prepared?
c)          State two basic differences of Branch Accounting and Departmental Accounting.
d)         When all partners become insolvent, what will be the treatment of ‘unpaid balance’ in Creditors A/c?
e)         How is interdepartmental transfer at cost price recorded?
3. Answer any four of the following questions:                                  5x4=20
a)         Give a brief note on AS-10 on valuation of fixed assets.
b)         State how the compliance of Accounting Standards in India is ensured.
c)          Guwahati Branch of Kolkata HO does not maintain its own books. Pass necessary Journal entries in the books of Kolkata HO for the following transactions effected during the year assuming books are kept under Stock and Debtors system:

Rs.
Goods sent to branch
Goods received by Branch
Cash remitted by Branch to the HO
Cash received by HO
30,000
25,000
40,000
32,000

d)         KGR runs a chemist shop. His net assets on 31st March, 2016, amounted to 20,00,000 After paying rent of 15,000 a year to the landlord (who is also an employee in the shop) for premises valued at 1,00,000, salary of 20,000 to the chemist, he earns a profit of 1,50,000. His landlord who incidentally is the chemist of the shop is keen to purchase the shop. 12% is considered to be a reasonable return on capital employed for this type of business. What can KGR expect as payment for goodwill? Make any reasonable assumption, if necessary.
e)         From the following information, calculate absolute surplus capital:
1)      Balance of partners capital as per last Balance Sheet:
A: 80,000
B: 50,000
C: 20,000
2)      Profit & loss A/c (Cr.) as per last Balance Sheet 24,000
3)      Profit sharing ratio = 3 : 2 : 1
f)       Explain the features of Independent Branch. Is a Foreign Branch an Independent Branch?
4. Answer the following questions:                                          10x4=40
a)      Explain the procedure to be followed for issuing IFRS by IASB.                                            10
Or
Explain briefly the requirement of the Accounting Standard -1 (AS-1) for disclosure of accounting policies.      10
b)      A company having its HO at Guwahati has a Branch at Tinsukia. The Branch receives all goods from HO who also remits cash for all expenses. Sales are made by the Branch on credit as well as for cash. Total sales made by the Branch for the year ending 31st March, 2016 amounted to 5,75,000 out of which 20% is cash sales. The following further information is available:

Rs.
Stock on 01.04.2015
Debtors on 01.04.2015
Petty cash on 01.04.2015
Remittances to Branch:
For Salary
For Rent
For Petty Cash
Petty expenses incurred by Branch
Cash received from Debtors
Bad debts written off
Normal loss of goods at Branch
Stock on 31.03.2016
85,000
80,000
1,200

30,000
10,000
4,800
4,000
4,80,000
500
200
36,000
All sales are made by Branch at cost plus 25%
Prepare Tinsukia Branch A/c in the books of HO of the year ended 31st March, 2016.                                        10
c)       Mr. Rahul Bajaj carries on his business through two departments – Department A and Department B. Following are the extracts of his Trial Balance as on 31st December, 2015:
Opening Stock:
A
B
Purchase:
A
B
Sales:
A
B

12,000
6,000

24,000
20,000

40,000
34,000
1,200
Purchase Return:
A
B
Sales Returns:
A
B
Salaries:
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Depreciation


4,000
3,000

2,000
1,400

3,600
2,700

Additional Information:
1)      Stock as on 31.12.15:
        A = Rs. 8,000
        B = Rs. 11,000
2)      The unallocated expenses are to be charged to each department in proportion to the cost of goods sold.
Prepare Departmental Trading and Profit & Loss A/c for the year ended 31st December, 2015.                     10
d)      A, B and C are partners in a firm sharing profits in the ratio 3 : 2 : 1 with the following assets and liabilities:
Balance Sheet
Liabilities
Amount
Assets
Amount
Capital accounts:
A
B
Reserve
Creditors

20,000
12,000
6,000
12,000
Sundry Assets
Profit & Loss A/c
Cs Capital
30,000
18,000
2,000

50,000

50,000
Assets realized 18,500 and expenses of realization amounted to 500. C became insolvent and his estate paid 50% of his debt. Close the books of the firm applying Garner Vs Murray rule.                                           10
Or
Describe the procedure of determining the purchase consideration on case a partnership firm is sold to a company. Also state the Journal Entries to be passed in the books of the partnership firm in such a scale.                            4+6=10

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