ST.
XAVIER’S COLLEGE
KOLKATA
(AUTONOMOUS)
1st SEMESTER EXAMINATION
NOVEMBER – DECEMBER 2018
[Link]
Monday, November 26, 2018
BCHCR110 9:00 AM to 12:00 Noon
3 hours
FINANCIAL ACCOUNTING
Full Marks : 80
READ THESE INSTRUCTIONS FIRST:
• Of the questions attempted, the answers to only the first required number of questions (as stipulated
in the question paper) will be evaluated. So please do not attempt extra questions.
• Use fountain pen or ball-point pen of blue or black ink.
• Answer in your own words as far as practicable.
• Do not write anything on the Question paper other than your Roll No.
GROUP – A [15 Marks]
Answer ANY THREE questions, each question carrying 5 marks.
GROUP – B [35Marks]
Answer ANY FIVE questions, each question carrying 7 marks.
GROUP – C [30 Marks]
Answer ANY TWO questions, each question carrying 15 marks.
At the end of the examination, fasten all your work securely together.
The marks are given in brackets [ ] at the end of each question or part question.
The question paper consists of 7 pages.
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Of the questions attempted, the answers to only the first required number of
questions (as stipulated in the question paper) will be evaluated.
So, PLEASE DO NOT ATTEMPT EXTRA QUESTIONS.
GROUP – A
Answer ANY THREE questions. [3×5=15]
1. Explain the obstacles in the process of adoption/convergence of IFRS in India.
2. Profit and Loss Account of Mr. A for the year ended 31st March 2018 includes the
following information:
(a) Depreciation provided ₹67,500;
(b) Bad Debts Written Off: ₹31,000;
(c) Increase in Provision for Doubtful Debts: ₹8,000;
(d) Transfer to workmen compensation fund: ₹35,000;
(e) Payment of tax: ₹6,000.
State which one of the items are transfer to provisions; transfer to reserves and neither
related to provisions nor reserves.
3. Trial Balance of Mr. Z contains the following after ascertainment of gross profit:
Debit balances ₹ Credit balances ₹
Closing Stock 34,000 Outstanding Salary (closing) 3,600
Advance Salary (opening) 5,600 Insurance claim received 6,000
Stock distributed as free sample 12,000
How would you treat the above in preparation of Profit & Loss Accounts and Balance
Sheet?
4. Who are the external users of accounting information?
5. S Ltd. books showed the WDV of Fixed Asset at ₹12,00,000 on 31/12/13. These assets
were revalued upward earlier by ₹1,20,000. They have now been revalued on 31/12/13.
Explain the treatment of the following subsequent independent cases of revaluations as
per AS 10, showing the relevant journal entries.
Case (a) the same Fixed Asset has been revalued at ₹14,00,000.
Case (b) The same Fixed Asset has been revalued at ₹10,20,000.
GROUP – B
Answer ANY FIVE questions. [5×7=35]
6. The Head office of a branch passes adjustment entry at the end of each month to adjust
the position arising out of inter-branch transactions during the month. From the
following inter-branch transactions in January, 2018, make the entry in the books of Head
Office:
(a) Mumbai Branch
(i) Received Goods: ₹60,000 from Kolkata Branch ₹40,000 from Patna Branch.
(ii) Sent Goods: ₹1,00,000 to Patna Branch, ₹80,000 to Kolkata Branch.
(iii) Bills Receivable drawn on: Patna Branch ₹60,000.
(iv) Salary paid to employees (as per H.O’s advice) : ₹40,000 of Kolkata Branch.
(b) Chennai Branch (apart from the above)
(v) Received Goods: ₹1,00,000 from Kolkata Branch, ₹40,000 from Mumbai Branch.
(vi) Cash sent: ₹20,000 to Kolkata Branch, ₹60,000 to Mumbai Branch.
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(c) Kolkata Branch (apart from the above)
(vii) Sent Goods to Patna Branch: ₹60,000.
(viii) Bills accepted in favour of: Patna Branch ₹40,000, Mumbai Branch ₹40,000.
7. From the following balance extracted from the books of XYZ, prepare Departmental
Trading Account and General Profit and Loss Account for the year ended 31st March,
2018:
Dr. ₹ Cr. ₹
Capital 3,00,000
Land and Building 1,25,000
Furniture 25,000
Opening Stock Deptt. A 30,000
Deptt. B 40,000
Purchase Deptt. A 10,00,000
Deptt. B 15,00,000
Sales Deptt. A 20,00,000
Deptt. B 32,00,000
Stock Reserve: Deptt. A 2,500
Deptt. B 6,000
General Expenses (not to be apportioned) 14,08,500
Sundry debtors 2,00,000
Sundry Creditors – 1,00,000
Drawings 2,80,000
Cash & Bank 10,00,000
56,08,500 56,08,500
Additional Information:
(1) Closing Stock: Deptt. A ₹1,30,000 including goods from Deptt. B ₹40,000 at cost to
Deptt. A. Deptt. B ₹2,60,000 including goods from Deptt. A ₹90,000 at cost to Deptt. B.
(2) Sales of Deptt. A include transfer of goods to Deptt. B of value ₹2,00,000 and sales of
Deptt. B includes transfer of goods to Deptt. A of value ₹3,00,000 both at market price
of transferor Deptt.
(3) Depreciate land and building by 5% and furniture by 10% p.a. (not to be apportioned)
8. Mr. A commenced business on 1.1.15 when they purchased plant for ₹7,00,000 and
adopted diminishing balance method @ 15% p.a. as method of depreciation. The
following purchases were made –
(a) 1.1.16- ₹1,50,000
(b) 1.1.18- ₹2,00,000
On 1.1.2018 it was decided to change the method of depreciation to straight line basis.
The remaining useful life for all assets purchased before 1.1.18 to be taken as 6 years and
for the asset purchased on 1.1.18 as 10 years with no scrap value.
Prepare the Plant account for the year ended 31.12.18.
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9. Mr. R purchased seven scooters on hire purchase basis on 1st July, 2017. The cash
purchase price each scooter was ₹50,000. He was to pay 20% for the cash purchase price
at the time of delivery and the balance in five half-yearly instalments starting from
31.12.2017 plus interest at 10% per annum.
On Mr. R’s failure to pay the instalment due on 30th June, 2018, it was agreed that he
would return 3 scooters to the vendor against the instalment (including interest) payable
on 30-06-2018 against all the scooters.
Mr. R charges depreciation @ 20% per annum.
Show Scooter Account and Vendor’s Account in the books of Mr. R till 30-06-2018. Mr. R
closes its books on 30-06 every year.
10. B. Bros closes its books on 30-06 every year. Physical verification of stock was done on
23.6.18. The value of the stock was ₹48,00,000. The following transactions took place
between 23.6.18 to 30.6.18:
(a) Purchases of ₹4,00,000 were made out of which goods worth ₹1,60,000 were
delivered on 5th July,2018.
(b) Sales were ₹13,60,000 which include goods worth ₹3,20,000 not yet delivered.
(c) Goods are sold at cost plus 25%. However goods costing ₹2,40,000 had been sold for
₹1,20,000.
Determine the value of stock to be shown in the Balance Sheet as at 30.6.18.
11. What do you mean by revenue in accounting? State three essential elements of
recognition of revenue. Suppose Mr. B received ₹2,400 on 31-08-2017 subscription for
delivery of 12 monthly magazines. Till 31-03-2018, he delivered 5 such magazines. How
much revenue should Mr. B recognise in the income statement ending on 31-03-2018?
12. Mr. Akash could not get his Trial Balance agreed on 31st March 2018 and used a Suspense
Account to put the difference. On a subsequent scrutiny he detected the following errors:
(a) Goods purchased from Mr. Vedant for ₹2,000 was entered in the Purchase Day Book
but omitted to be posted to his account in the creditors’ ledger.
(b) Goods returned by Mr. Vivek for ₹1,500 were not debited to the Returns Inward
Account.
(c) An office typewriter purchased for ₹5,000 was debited to the Purchase Account.
(d) An item of purchase of ₹351 was entered in the purchase book as ₹35 and posted to
the debit of supplier’s account as ₹51.
(e) Repairing expenses of ₹450 was posted to the furniture account as ₹540.
Pass the journal entries for rectification of the above errors (narration not required).
[1+1+1+2+2]
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GROUP – C
Answer ANY TWO questions. [2×15=30]
13. The following is the Trial Balance of M/s G Sons as on 31st December 2017. Prepare a
Trading and Profit and loss Account for the year 2017 and the Balance Sheet as at 31st
December 2017.
Particulars Debit (₹) Credit (₹)
Purchases 1,80,000
Opening Stock 10,000
Salaries less Provident Fund deduction 5,400
Provident Fund Remittance including Proprietor’s contribution of 50 percent 1,200
Rent at the rate of ₹250 per month 2,750
Machinery 29,000
Wages 3,000
Furniture and Fittings 5,000
Electricity 550
Trade Expenses 1,500
Debtors 10,500
Interest on Loan 900
Commission 200
Buildings 30,000
Sales 2,05,000
10% Loans 10,000
Capital 55,000
Creditors 15,000
Drawings 5,000
2,85,000 2,85,000
Other Information:
(a) Wages include ₹1,000 paid for repairing of machinery. This repair increased the
productivity of the machinery.
(b) Purchases include cost of a Motor Car ₹5,000.
(c) Proprietor has taken goods costing ₹1,000 for which no entry has been made.
(d) Sundry Debtors include ₹500 which had become bad.
(e) Provide 10% for doubtful debt.
(f) Goods costing ₹5,000 were destroyed by fire and insurance claim was received for
₹4,000 which was credited to sales A/c.
(g) Provide depreciation on closing balances: at 10% on machinery, furniture and motor
car and at 5% on Buildings.
(h) On 31.12.17, stock was valued at ₹12,000.
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14. A, B, C and D were partners in a firm sharing profits and losses in the ratio [Link]. The
following balance sheet as at 31-03-2018:
Amount Amount
Liabilities Assets
(₹) (₹)
Partners’ Capital: Furniture 14,000
A 20,000 Debtors 22000
B 15,000 Less: PBD (1000) 21,000
A’s Loan 12,500 Cash at Bank 3,000
Sundry Creditors 25,000 Stock 12,500
Capital:
C 16,000
D 6,000
72,500 72,500
The firm was dissolved on 31-03-2018. B was appointed to realize the assets and payoff
the liabilities and was entitled to receive 5% of the amount realized from the assets.
However, he is to bear all expenses relating to dissolution.
The assets realized as follows:
Furniture ₹11,000; Debtors ₹16,500 and Stock ₹10,500.
Sundry creditors were paid in full including a contingent liability of ₹3,500. Realization
expenses of ₹1,500 were paid by the firm. C was insolvent and ₹5,000 could be recovered
from his private estate.
Show Realisation A/c, Bank A/c and Capital account applying Garner Vs. Murray.
15. Following is the Receipt and Payment account of a Howrah Club for the year ended
31.3.2018
Amount Amount
Particulars Particulars
(₹/=) (₹/=)
To Opening Balance By Administrative expenses 1,25,000
Cash 3,000 By Cultural Programme 2,63,000
Bank 7,000 expenses
To Membership fees received By F. D. with bank 1,25,000
Up to 31.3.2017 14,000 By Investment in ICICI Bonds 3,00,000
For 2017-18 1,50,000 By Fixed assets purchased 80,000
For 2018-19 16,000
To Advertisements from 5,00,000
souvenir for cultural programme
To F. D. matured 75,000
To Interest on Savings account 700
To Interest on F. D. (including 22,000
interest on matured one) By Closing balance:
To Sale of tickets – Cultural 25,000 - Cash 2,700
Programme - Bank 5,000
To Govt. Security Maturity 88,000
(Cost ₹80,000)
9,00,700 9,00,700
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The Club informs you that:
(a) Membership fees for 2017-18 due are ₹25,000; and ₹1,000 from a member who has
not yet paid for 2016-17.
(b) Income receivable on 31.3.2018 on ICICI bond is ₹30,000 and on Govt. securities is
₹24,000;
(c) Depreciation to be provided is ₹12,500;
(d) Cultural programme is an annual feature.
The Balance Sheet as on 31.3.2017 is also provided as below:
Particulars Amount (₹) Particulars Amount (₹)
General fund 6,05,000 Cash 3,000
Subscription in advance 10,000 Bank Account 7,000
Fixed Deposit 2,00,000
Govt. Securities 3,00,000
Fixed Assets 90,000
Subscription receivable 15,000
6,15,000 6,15,000
Prepare Income and Expenditure and the Closing Balance Sheet for the year 2017-18.
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