2011
FINANCIAL ACCOUNTING-I
Full Marks: 80
Time: 3 hours
(The figures in the margin indicate full marks for the questions)
Answer all the questions.
1. Give the meaning of the following: 1x10=10
a) Trading Accounts.
b) Accounting standard.
c) Balance sheet.
d) Sectional Balancing Ledger system.
e) Cash Price.
f) Down Payment in Hire Purchase System.
g) Hire Purchase Price.
h) Minimum rent in Royalty Accounts.
i) Strikes and Lockout.
j) Sub-lease under Royalty Accounts.
2. Write the answer in short: 2x5=10
a) Business Entity Concepts of Accounts.
b) Mention two limitations of the Sectional Balancing Ledger.
c) Mention the two benefits derived from sectional Balancing Ledger.
d) Mention two basic features of Installment Purchase System.
e) Mention four types of rights one may acquire after payment of royalty.
3. Answer any four: 5x4=20
(a) State the Nature of Accounting Information in brief.
(b) Mention the objectives of self Balancing Ledger System.
(c) Rohini Kant purchases a machine on hire purchase system. Rs. 508 is paid on signing the agreement (down payment) and Rs. 1,800 in 3 installments of Rs. 600 each at an interval of 2 years. Hire vendor charges compound interest @ 5% p.a. Calculate interest included in each installment.
(d) Mention the points of difference between Hire Purchase System and Credit Purchase.
(e) Ganesh Enterprise acquired a lease of a colliery from Mr. Shiva at a minimum rent of Rs. 25,000 p.a. merging into a royalty of Rs. 5 per ton of coal raised. Short working could be recouped within the first four years of the lease. The outputs (in tones) for the first five years were as follows:
1st years
2nd years
3rd years
4th years
5th years
|
3000 tones
4000 tones
6000 tones
3000 tones
10000 tones
|
Prepare the statement showing the calculation of royalty, shortworking.
(f) State the manner of Recoupment of shortworking under Royalty Accounts.
4. What is generally accepted Accounting Principle? Describe the role of Accounting Principles in the preparation of financial statements. 2+8=10
Or
What is Accounting Standards Board (ASB)? Elucidate the procedure to set Accounting Standards in India. 2+8=10
5. M/s. Hema Bros follow self balancing ledger system. The following information is obtained for the month of January, 2011.
Or
Rs.
| |
Jan 1, 2010 Balance of debtors accounts
Balance of creditors accounts
During the month credit purchases
Credit sales
Paid to Creditors
Discount Received
Goods returned to suppliers
Payment received from debtors
Discount offered
Goods returned by customers
Bad debt
|
1,57,500
87,200
68,500
84,300
78,200
1,200
4,500
1,25,500
1,400
2,400
500
|
Prepare (1) General Ledger Adjustment Accounts in the Debtors Ledger (2) General Ledger Adjustment Accounts in the Creditors Ledger. 5+5=10
Or
From the following information prepare (1) Total Debtor’s Accounts and (2) Total Creditor’s Accounts. 5+5=10
Rs.
| |
Jan 1, 2010 Balance of Sundry Debtors
Balance of Sundry Creditors
31 Jan, 2010 Credit Purchases
Credit Sales
Cash Purchase
Paid to creditors
Discount allowed by them
Cash Received from Debtors
Discount allowed to them
Bills Payable accepted
Bills Receivable received
Returned Inward
Returned Outward
Rebate allowed to Debtor
Rebate allowed by Creditor
Provisions for doubtful debts
Bad Debt
Bills Receivable dishonoured
Bad Debt Recorded
|
32,000
37,000
9,000
19,600
1,000
19,750
650
15,600
400
3,000
6,000
1,750
1,200
550
300
320
900
750
500
|
6. Dibrugarh Dutta Corporation Ltd. purchased 5 cars on Hire Purchase System from Hiren Motors each costing Rs. 50,000. The cars were purchased on 1.1.2009. The payment was to be made as under: 5+5=10
10% of cash price down.
25% of cash price at the end of four subsequent half years.
The payment on 31st December 2009 could not be made and the vendor took back 2 cars leaving remaining 3 cars with the purchaser. The value of 2 cars was fixed at cost less 25% for depreciation and it was to be adjusted for payment due on other 3 cars.
Dibrugarh Dutta Corporation Ltd. closes its book on 30th June each year and charges depreciation @ 15% p.a. on original cost.
The vendor spent Rs. 10,000 for overhauling the cars and sold them for Rs. 90,000.
|
Show the Cars Account and Hiren Motors Account (Vendor) in the books of Dibrugarh Dutta Corporation Ltd.
Or
Laxmi Company Ltd. purchases a truck on Installment payment system from Anil Enterprise on 1.1.2008. The cash price of the truck was Rs. 4,00,000. The price was to be paid as Rs. 1,20,768 down and the balance in 3 equal annual installments commencing from 31.12.2008, at 5% interest per annum. Laxmi Company Ltd. charges depreciation at 20% on diminishing balance method Re. 1 can buy an annuity of Rs. 0.367215 at 5% for 3 years.
Prepare Anil Enterprise A/c and Interest A/c in the books of Laxmi Company Ltd. 5+5=10
7. Mr. Paresh who had patented a circular TV antenna, granted SKY Enterprises a licence for ten years manufacture and sell the product on the following terms: 5+5=10
1) Sky Enterprises was to pay Mr. Paresh a Royalty of Rs. 10 for each antenna sold.
2) The minimum royalty for each of the first three years covered by the licence was to be Rs. 50,000. After three years, royalties were to be payable on the actual number of antennas sold.
3) If royalties on an antenna sold amounted to less than Rs. 50,000 Sky Enterprises was entitled to deduct the deficiencies from royalties in excess of the sum payable in respect of each of the first three years of the agreement. The number of antennas sold in the first four years were as follows:
Year ended on 31st March:
2005
2006
2007
2008
|
4,300
4,900
5,450
5,250
|
You are required to prepare (1) Royalty Accounts and (2) Mr. Paresh Accounts in the books of Sky Enterprises. 5+5=10
Kalita Enterprise holds a lease of coal mine from Dutta Corporation Ltd. at a royalty of Rs. 2 per ton of coal produced with a minimum rent of Rs. 8,000 p.a. the shortworking being recoverable out of the royalty of the next two years. After working the mine for two years Kalita Enterprise sub-leased part of the mine to Roy Enterprise at a royalty of Rs. 2.50 per ton with a minimum rent of Rs. 4,000 p.a. Roy Enterprise has a right to recover shortworking during the first three years of the sub-lease. 10
Annual Production (in tones)
2005
|
2006
|
2007
|
2008
|
2009
| |
Kalita Enterprise
Roy Enterprise
|
2,500
-
|
2,800
-
|
3,800
1,400
|
5,000
200
|
4,000
1,800
|
You are required to show necessary Journal entries in the books of Kalita Enterprise for the years 2005 to 2009.
-000-
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