2018
FINANCIAL ACCOUNTING
- II
Paper: 202
Full Marks – 80
Time – Three Hours
The figures in the
margin indicate full marks for the questions
1. Fill
up the blanks: 1x10=10
a)
AS 2 has prescribed _______ and _______ as the
methods of valuation of inventory.
b)
Cash flows arising from taxes on income should
be classified as cash flows from _______ activities.
c)
An enterprise that is controlled by another
enterprise is known as _______.
d)
In case of an independent branch; the Head
Office Account maintained by the Branch is of the nature of a _______ account.
e)
Super profit is the difference between actual
profit and _______.
f)
In departmental account, fire insurance on
building is allocated on the basis of _______.
g)
Branch Stock Account is always prepared at
_______ price.
h)
In case of sale of a partnership to a company,
if purchase consideration is less than the net assets, it is called _______.
i)
If the rate of gross profit for department ‘A’
is 25% of cost, then the amount of gross profit on a turnover of Rs. 1 lakh
will be _______.
j)
Under Debtors System, Branch Account is treated
as _______ account.
2.
Answer the following questions in brief: 2x5=10
a)
Why was IFRS formed?
b)
What are the accounts prepared by the Head
Office for the dependent branches under Final Account System?
c)
Mention the methods of Departmental Accounting.
d)
‘Dissolution of a firm automatically results in
dissolution of a partnership.’ – Comment.
e)
When all partners become insolvent, what will be
the treatment of ‘unpaid balance’ in creditors account?
3.
Answer the following questions: 5x4=20
a)
Write a note on the scope of Accounting
Standard.
b)
What rule is to be followed for converting the
following items of a foreign branch into home currency?
1)
Revenue Items.
2)
Fixed Assets.
3)
Opening Stock.
4)
Head Office Account.
5)
Depreciation.
What is the need of preparing Memorandum Debtors Account in
Branch Accounting? How is it different from Branch Debtors Account? 2+3=5
c)
Compute the value of goodwill, from the
following information and on the basis of 2 years purchase of super profits
calculated on the average profit of last 3 years.
1)
Average profit (after tax) for the last 3 years
Rs. 1,65,000 which includes Rs. 15,000 loss on sales of a plot of land.
2)
The company declares 50 per cent dividend on the
shares of Rs. 10 each fully paid.
3)
Market value of each share is Rs. 25.
4)
Average capital employed is Rs. 10,00,000.
Or
Write a note on capitalized average profit method of
valuation of goodwill.
d)
Explain how the partners’ capital accounts are
normally settled in the case of dissolution of partnership firm.
Or
State the reasons for dissolution of partnership firm by the
court.
4.
Answer the following questions: 10x4=40
a)
Write a critical note on any one of the
following:
1)
Valuation of Inventory as per AS – 2.
2)
Accounting as per AS – 10.
b)
Mr. Amit has a branch in Barpeta. He invoices
goods to the branch at selling price which is cost plus 33.33%. From the
following particulars prepare Branch Stock Account, Branch Adjustment Account
and Goods sent to Branch Account in the books of Mr. Amit. 5+3+2=10
|
|
Rs.
|
|
Stock on 1-1-17
(invoice price)
Debtors on 1-1-17
Goods sent to branch
at invoice price
Cash sales
Credit sales
Cash received from
debtors
Discount allowed to
customers
Bad debts written
off
Cheque sent to
Branch:
Salaries
Sundry expenses
Stock on 31-12-16
(invoice price)
|
30,000
22,800
1,34,000
62,000
74,800
80,000
600
500
10,000
3,400
26,800
|
Or
A
company supplies goods to its branch at Guwahati at invoice price which is cost
plus 50%. From the following particulars prepare (1) Branch Stock Account and
(2) Branch Adjustment Account in the books of Head Office. 6+4=10
|
|
Rs.
|
|
Stock on 1-1-17
(invoice price)
Debtors on 1-1-17
Goods invoiced (cost
price)
Cash sales
Credit sales
Collection from
debtors
Return from debtors
Goods returned to
Head Office
Transfer from Nagpur
Branch
Shortage of stock
Discount allowed to
customers
Expenses at branches
|
31,200
17,400
72,000
70,000
60,200
59,600
3,000
-
4,200
600
700
13,400
|
c)
The following balances as at 31-12-17 has been
extracted from the books of Sarma, the proprietor of a departmental store:
|
|
Rs.
|
|
Wages and salaries
Maintenance
Rent
Advertisement
Sundry debtors
Sundry creditors
Provision for
doubtful debts
Furniture
|
1,42,500
12,360
27,050
15,000
41,900
16,800
5,000
46,500
|
The records relating to the stock are (in Rs.)
|
|
Stock on
1-1-17
|
Purchases
|
Purchase
Return
|
Stock
On 31-12-17
|
|
Dept. X
|
10,700
|
94,600
|
900
|
21,000
|
|
Dept. Y
|
68,000
|
2,20,980
|
2,200
|
61,600
|
Additional information:
1)
Dept X sells articles for Rs. 40 each which is
equivalent to 80% above cost price, which Dept Y sells articles for Rs. 60 each which is equivalent to double the
cost price.
2)
Write off bad debts Rs. 3,300 and provision for
doubtful debts to 10% of debtors. These adjustments should be apportioned
equally between Dept X and Dept Y.
3)
Provide Rs. 1,150 rent due to be paid.
4)
Depreciation furniture by 10%.
5)
All general expenses should be apportioned
between Dept X and Dept Y on the basis of the number of articles sold by these
departments during the year.
You are required to prepare Departmental Trading and P/L
Account for the year ended 31-12-17.
Or
JP
& Co. has two departments A and B. Dept A sells goods to Dept B at normal
selling price. From the following particulars, prepare Departmental Trading and
Profit & Loss Account for the year ended 31-12-17 and also ascertain the
net profit.
|
|
Dept A (Rs.)
|
Dept B (Rs.)
|
|
Opening Stock
Purchases
Goods from Dept A
Wages
Conveyance expenses
Closing stock at
cost to the Department
Sales
Printing and
Stationery
|
2,00,000
46,00,000
-
2,00,000
20,000
10,00,000
46,00,000
40,000
|
4,00,000
14,00,000
3,20,000
2,80,000
3,60,000
30,00,000
32,000
|
The following expenses incurred are not apportioned:
1)
Salaries Rs. 5,40,000.
2)
Advertisement expenses Rs. 1,80,000.
3)
General expenses Rs. 16,00,000.
4)
Depreciation @ 25% on the machinery value of Rs.
96,000. Advertisement expenses are to be apportioned in the turnover ratio.
Salaries in 2:1 ratio and depreciation in 1:3 ratios between the departments A
and B. General Expenses in the ratio 3: 1.
d)
L and T were in partnership sharing profits and
losses in the ratio of 3:1. The following is the Balance Sheet of the
partnership as at 31-3-17:
|
Liabilities
|
Amount
Rs.
|
Assets
|
Amount
Rs.
|
|
Capital Account:
L
24,000
T 8,000
Current Accounts:
L
4,200
T 2,000
Loan: T
Creditors
|
32,000
6,200
3,000
14,320
|
Fixed Assets
Stock
Debtors
Cash at Bank
|
21,000
11,200
19,600
3,720
|
|
|
55,520
|
|
55,520
|
E Ltd agreed to take over stock and fixed assets, excluding
the value of motor car Rs. 4,100 for a consideration of Rs. 48,000 which is to be satisfied
by payment of cash Rs. 16,000, allotment of 160 preference shares of Rs. 100
each valued at Rs. 75 per share, and the balance by allotment of 1,600 equity
shares of the face value of Rs. 10 each. The debts realised Rs. 19,200 and the
creditors were settled for Rs. 14,000. The following were agreed between the
partners:
1)
The equity shares should be allotted in the
ratio of the partners capital accounts as per Balance Sheet.
2)
L to take over the motor car at an agreed value
of Rs. 4,200.
3)
The preference shares to be allotted to T to the
value of his loan and the remainder to be allotted equally between the
partners.
4)
Balance remaining to be settled in cash.
Prepare:
1)
Realisation Account.
2)
Partner’s Capital Account.
3)
Bank Account. 5+3+2=10
Or
The following is the Balance Sheet of S and R as on
31-12-2017.
|
Liabilities
|
Amount (Rs.)
|
Assets
|
Amount (Rs.)
|
|
Sundry Creditors
Loan from Lata wife
of S
Loan from R
Reserve Fund
Capital:
R
16,000
S 20,000
|
76,000
20,000
30,000
10,000
36,000
|
Cash at Bank
Stock
Sundry Debtors 40,000
Less: Provision 2,000
Furniture
Plant
Investment
Profit & Loss
A/c
|
23,000
12,000
38,000
8,000
56,000
20,000
15,000
|
|
|
1,72,000
|
|
1,72,000
|
The firm was dissolved on 31-12-17 and following was the
result:
1)
S took over investment at an agreed value of Rs.
16,000 and agreed to pay off the loan to Lata, wife of S.
2)
The assets realised as under:
a)
Stock Rs. 10,000.
b)
Debtors Rs. 37,000.
c)
Furniture Rs. 9,000.
d)
Plant Rs. 50,000.
3)
The expenses were Rs. 2,200.
4)
The sundry creditors were paid off less 2.5%;
profit and loss dividend in the ratio of 3:2.
Show Realisation Account, Bank Account and Partner’s Capital
Accounts. 5+2+3=10
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