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Gauhati University Question Papers:Financial Accounting - II (May-June’ 2012)


Gauhati University Question Papers
Financial Accounting - II (May-June’ 2012)
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. Give the meaning of the following terms:                                        1x10=10

a)      Indian Accounting Standard.
b)      International Financial Reporting Standard.
c)       Synthetic system of Branch Accounting.
d)      Inland Branch under Branch Account.
e)      Dependent Branch under Branch Accounts.
f)       Interdepartmental Transfer under Departmental Accounts.
g)      Goodwill.
h)      Realisation Accounts of Partnership firm.
i)        Insolvent partner.
j)        Conversion of partnership firm into a company.
2. Answer the following questions very briefly:                                  2x5=10
a)      State two functions of International Accounting Standard Board.
b)      Mention two basic needs of Branch Accounting.
c)       Mention two methods of recording departmental transaction in Departmental Accounts.
d)      Write two factors responsible for emergence of goodwill in a business firm.
e)      State two financial consequences of insolvency of a partner.
3. Answer the following in brief:                                               5x4=20
a)      Define the terms’ cash in transit’ and goods in transit’ and rite the accounting treatment of ‘cash in transit’ and ‘goods in transit’ under debtor system of Branch Accounts.
Or
Write the distinction between ‘Branch Debtors Account’ and ‘Memorandum Branch Debtors Account’.
b)      Discuss the process of issuing International Financial Reporting Standards (IFRS).
c)       Smith Company Limited has the following assets and liabilities:

Rs.
Goodwill
Other Fixed Assets
Current Assets
Preliminary Expenses
It’s all outstanding liabilities amounted to
4,000
8,000
4,000
200
2,000
It had earned an annual average profit before tax Rs. 3,000 for the last five years.
The company is likely to be purchased by Alfred Limited, In which case, the rent paid by Smith Company Limited Rs. 500 p.a. will not be a charge in future.
Assuming a normal return of 10% and tax rate at 40%, calculate the value of goodwill of Smith Company Limited.
d)      X and Y were partners sharing profit and losses equally. On 31st December, 2011 they decided to dissolve their partnership firm when their books showed the following balances:

Rs.
Goodwill
Furniture
Investment
Stock
Sundry Debtor
Sundry Creditor
X’s Capital
Y’s Capital
10,000
9,000
28,000
47,000
32,000
45,000
35,000
46,000
The Realisation expenses amounted to Rs. 2,000.
The firm realised Rs. 37,000 from Sundry Debtors.
Furniture and stock were sold for Rs. 4,000 and Rs. 36,000 nothing could be realised from goodwill.
Investments were taken over by X for Rs. 38,000.
You are asked to prepare Realisation Account.
Or
State in brief the five modes of Dissolution of Partnership Firm.
4. Explain the As-1: Disclosure of Accounting Policies or AS-10: Accounting for fixed assets prescribed by the ICAI.         10
5. (a) On 1st April, 2011 Jorhat Limited opened a branch at Golaghat. All goods sold at the branch are received from the head office invoiced at cost plus 20%.                                                                                10
All expenses relating to Branch are paid by the Head Office. All cash collections are remitted daily to head office by the branches. The following particulars relating to the year ended on 31st March, 2012 have been extracted from the weekly statement sent by the branches.

Rs.
Cash sale (40% of net sales)
Sales returns
Sundry debtors
Rent and tax
Bad debts
Cost of goods sent to Branch
General expenses
Goods received from H.O.
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Closing stock in hand
Wages
39,300
3,650
17,250
2,000
500
60,000
1,300
70,000
4,000
17,500
9,000
Golaghat Branch Account as would it appear in the books of the head office.
Or
(b) Elaborate the ‘Stock and Debtor System’ of Branch Accounting.                                    10
6. (a) From the following Trial Balance extracted from the books of M/s. Nilima Stores, prepare the departmental Trading and Profit and Loss Accounts for account for the year ended 31st December, 2011.                           5+5=10
Particulars
Debit
Credit
Opening Stock
Department A
Department B
Purchase and sale
Department A
Department B
Carriage Inward
Department A
Department B
Machinery
Department A
Department B
Salaries
Rent  1,200
Repairs to machinery
Debtors & Creditors
Capital
Cash in hand
Bills receivable and payable
Drawing
Buildings

10,000
8,000

18,000
15,000

400
200

2,000
1,600
6,000

3,000
4,500

1,200
1,900
2,000
6,000




30,000
28,000









6,000
16,000

1,000


81,000
81,000
Additional information for department A and B respectively is as follows:-
1)      Closing stock on 31st December, 2011
        Department A = Rs. 14,000
        Department B = Rs. 12,000
2)      Salary to be allocated in the ratio of 7 : 3 and repairs to machinery in the ratio of 2 : 3
3)      Area of building is occupied in the ratio of 3 : 2.
4)      Depreciate building at 5% p.a. and machinery at 10% p.a.
Or
(b) Review the importance of valuation of goodwill for partnership firm, company and for public sector undertaking.
7. (a) Apu and Nipu are partners in a firm sharing profit and losses in the ratio of 3 : 2. They decided to dissolve their firm on 31st December, 2011 when their Balance Sheet was as under:                                     4+2+4=10
Liabilities
Amount
Assets
Amount
Capital:
Apu
Nipu
Creditors
Profit and Loss A/c

17,500
10,000
2,000
4,500
Freehold
Property
Investment
Debtors
Stock
Bank
Cash
16,000

4,000
2,000
3,000
2,000
7,000

34,000

34,000
The partners decided to dissolve the firm on the above date. Apu took over the investment at an agreed value of Rs. 3,800. Other assets were realised as follows:
Freehold property Rs. 18,000
Debtors 80%
Stock Rs. 2,800
Creditors of the firm agreed to accept 5% less.
Expenses on realisation of assets amounted to Rs. 400
There was a typewriter in the firm which was bought out of the firm’s money was not shown in the above balance sheet. The typewriter is now worth Rs. 3,000 but was sold for Rs. 1,000. Close the firm’s Book of Accounts by preparing a Realisation Account, Partner’s Capital Account and Bank Account.
Or
(b) Explain the procedures to be followed on dissolution in respect of settlement of Accounts of the Partnership Firms.

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