Advanced Financial Accounting Question Paper 2023
[Gauhati University BCOM 5th SEM CBCS Pattern]
COMMERCE (Honours Elective)
Paper: COM-HE-5026
(Advanced Financial Accounting)
Full Marks: 80
Time: 3 hours
The figures in the margin indicate full
marks for the questions.
1. (a) State whether each of the following statements are True or False: 1x5=5
(i) Minimum rent is payable only when actual royalty is lesser than minimum rent.
(ii) In departmental accounting, each department is considered as a separate profit center.
(iii) Purchase consideration is settled only in cash.
(iv) Government Accounting follows double entry system.
(v) On dissolution of a firm, goodwill appearing in the Balance Sheet is transferred to realisation account.
(b) Fill in the blanks with appropriate words: 1x5=5
(i) Purchase consideration is the difference between the value of assets and liabilities taken over under _______ method.
(ii) Short working is the excess of minimum rent over _______.
(iii) Expenses which cannot be apportioned among the departments should be shown in _______.
(iv) The differences between standard turnover and actual turnover during the indemnity period is called _______.
(v) When a firm is dissolved _______ account is prepared to ascertain profit or loss on realisation.
2. Answer the following questions briefly: 2x5=10
(a) What do you mean by short workings?
(b) Mention two objectives of preparing departmental accounting.
(c) State two differences between dissolution of partnership and dissolution of a firm.
(d) What is memorandum trading account in the context of insurance claim?
(e) Mention two features of Government Accounting.
3. Answer any four questions: 5x4=20
(i) Explain how common expenses are apportioned among different departments.
(ii) Mention the differences between government accounting and commercial accounting.
(iii) Describe the procedure to be followed to lodge claim before insurance company for indemnification of loss of stock due to fire.
(iv) What is amalgamation of firms? What are the objectives of amalgamation?
(v) Briefly explain the impact of strike and lockout on the payment of royalty.
(vi) Explain the rule laid down in Garner vs. Murray case.
4. Answer the following questions: 10x4=40
(i) Mr. Rajat carries his business under two departments viz. X and Y. Following is the extract of his Trial Balance as on 31st December, 2022:
|
|
Amount (Rs.) |
Department X (Rs.) |
Department Y (Rs.) |
|
Opening Stock Purchases Purchases return Carriage inward Wages Sales Sales return Other Expenses: Salaries Advertisement Bad debts Depreciations Sundry Expenses |
8,000 4,000 2,000 2,000 1,000 |
8,000 30,000 2,000 1,000 2,000 50,000 2,000 |
12,000 50,000 4,000 2,000 3,000 70,000 3,000 |
Additional Information:
(a) Closing stock as on 31st December, 2022 Department X Rs. 9,000 and Department Y Rs. 13,000.
(b) Unallocated expenses are to be apportioned on the basis of departmental cost of goods sold.
Prepare Departmental Trading and Profit and Loss A/c.
Or
(ii) Dipali and Barnali were partners in a firm sharing profits and losses in the ratio of 3:2, they decided to dissolve their firm on 31st December, 2022 when their Balance Sheet was as under:
Balance Sheet as on 31st
December, 2022
|
Liabilities |
Amt. (Rs.) |
Assets |
Amt. (Rs.) |
|
Capital: Dipali Barnali Creditors Profit and Loss A/c |
17,500 10,000 2,000 1,500 |
Investment Other Assets Bank Cash |
4,000 21,000 2,000 4,000 |
|
|
31,000 |
|
31,000 |
The partners decided to dissolve the firm on the above data. Dipali took over the investments at an agreed value of Rs. 3,800 other assets were realised Rs. 2,600.
Creditors of the firm agreed to accept 5% less. Expenses of realisation of assets amounted to Rs. 400. There was a typewriter in the firm which was bought out of the firm’s money at Rs. 2,200, was sold for Rs. 1,000.
Prepare a necessary ledger accounts to close the books of the firms.
(iii) From the following information, compute the amount of claim for consequential loss:
(a) The fire broke out on 1st July, 2022 and it affected sales for three months.
(b) Sales for three months ending 30th September in 2021 and 2022 were Rs. 1,50,000 and Rs. 50,000 respectively.
(c) The policy was for Rs. 4,50,000 with a six months period of indemnity.
(d) Sales for 12 months ended on 30th June, 2022 were Rs. 19,00,000.
(e) Accounts are prepared on 31st December.
(f) The net profit for 2021 amounted to Rs. 2,50,000 after debiting standing charges totaling Rs. 1,10,000.
(g) Sales for 2021 were Rs. 18,00,000.
(h) A sum of Rs. 3,500 was spent as additional expenses to mitigate the effect of the loss.
Or
(iv) Ramen and Suren are two equal partners in a firm. Following was their Balance as on 31st March, 2023:
Balance Sheet as on 31st March,
2023:
|
Liabilities |
Amount (Rs.) |
Assets |
Amount (Rs.) |
|
Creditors Reserve Capital: Ramen Suren |
12,000 2,000 20,000 15,000 |
Furniture Stock Debtors Cash |
15,000 15,000 16,000 3,000 |
|
|
49,000 |
|
49,000 |
They wanted to amalgamate their business with that of Arun and Barun whose Balance Sheet as on that date was as follows:
Balance Sheet as on 31st March,
2023:
|
Liabilities |
Amount (Rs.) |
Assets |
Amount (Rs.) |
|
Creditors Bills payable Capital: Arun Barun |
10,000 5,000 15,000 12,000 |
Machinery Stock Debtors Cash Profit & Loss A/c |
20,000 9,000 7,500 3,500 2,000 |
|
|
42,000 |
|
42,000 |
Arun and Barun share profits in the ratio of 3:2. Profits and Losses of the new firm is to be shared equally. Assets and liabilities of the firms are to be taken over at agreed values as stated below:
|
Ramen and Suren firm: |
(Rs.) |
|
Furniture at Stock Debtors Goodwill Cash |
14,000 16,000 14,000 10,000 3,000 |
|
|
57,000 |
|
Arun and Barun firm: |
(Rs.) |
|
Machinery Debtors Goodwill Cash |
18,000 7,000 5,000 3,500 |
|
|
33,500 |
You are required to give the opening entries and draw the new Balance Sheet of the new firm taking Rs. 80,000 as the combined capital of the firm to be contributed equally by the partners. 10
(v) A company has taken a lease of land at a royalty of Rs. 5 per ton of lime raised with a minimum rent of Rs. 30,000 per annum having right to recoup shortworking within next two years of its occurrence subject to a maximum of Rs. 5,000 p.a.
The outputs of first five years are given below:
|
1st year 2nd year 3rd year 4th year 5th year |
4,000 tons 4,500 tons 8,000 tons 8,200 tons 5,500 tons |
Prepare a royalty statement and give Journal entries in the books of lessee.
Or
(vi) What are the different methods of determining purchase consideration when a firm is sold to a company? Also mention modes of discharging purchasing consideration. 6+4=10
(vii) What is piecemeal distribution? What are the different methods of piecemeal distribution? Explain them. 2+8=10
Or
(viii) Write short notes on: (any two) 5x2=10
(a) Governments Accounting Standard Advisory Board.
(b) Modes of dissolution of partnership firm.
(c) Features of Departmental Accounting.
***
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