HI-AIMS COLLEGE OF COMMERCE AND MANAGEMENT SARGODHA

SENDUP EXAM 2014, B.Com Part-II

Paper: Advanced Accounting Total Marks: 100Paper Code:BC 401 Time Allowed: 3hr

Note: Attempt any five questions All questions carry equal marks.Question No.1: A company has outstanding 6% debentures of Rs.2,00,000 on 1st January 2013. The company pays interest on 30th June and 31st December. It purchases debentures of Rs.20,000 for cancellation on 1st May, 2013 at Rs.101 cum-interest. It further purchases for redemption debenture of Rs.40,000 on 1 st September, 2013 at Rs.98 ex- interest.Requirement: You are required to pass the necessary journal entries in the books of the company for year 2013.

Question No.2: On 1st January 2001 Azam trading acquired a machine on hire purchase. The terms on the contract were as follow:

i. The cash price of the machine was Rs 10,000.ii. Rs 1,000 were paid on the signing of the contract.

iii. The balance was to be paid in annual installments of Rs 3,000 plus interest.iv. Interest chargeable on the outstanding balance was 5% per annumv. Deprecation at 10 % per annum is to written off on the diminishing balance method.

Required: (a) Prepare the machinery & hire vendor account from 1st January 2001 to 31st December 2002(b) Show the balance account in the Balance sheet of the purchaser as at December 31st December 2002.

Question.No.3: The following data is related to ABC Company for the year 31st Dec. 2011.Debit Balance Rs Credit Balance Rs

Building 175,000 Issued, subscribed & paid up capitalPurchases 500,903 (60,000 equity shares of Rs. 10 each) 600,000Manufacturing expenses 202,800 General reserve 250,000Establishment expense 36,814 Unclaimed dividend 6,526General charges 31,078 Trade creditors 36,974Machinery 200,000 Sales 983,947Motor vehicles 95,000 Depreciation reserve 71,000Furniture 15,000 Interest on investments 8,544Opening stock 172,058 Profit & Loss A/c 1st January 2011 16,848Debtors 148,380 Staff provident fund 37,500Investments 288,950Cash 72,356Director’s Fees 18,000Interim dividend 45,000Repairs & Renewals 10,000

20,11,339 20,11,339Adjustments:-

i. The stock on 31st December 2011 was at Rs. 1,50,214

ii. Provide Rs. 20,000 for deprecation on fixed assets, Rs. 6,500 for Manager Commission and Rs. 1,500 for

company’s contribution towards staff provident fund

iii. Interest accrued on investment amount to Rs. 5,348.

iv. A provision of Rs 30,848 is necessary for taxation.

Roll no________

v. Directors propose a final dividend of Rs. 45,000.

vi. Credit sales of Rs. 1,600 were left unrecorded.

Required:- Prepare Trading and Profit and Loss Account and Balance Sheet.Question.No.4: Following are the extracts from the financial statements of paradise paper ltd at year ended on

31st December 2009

Particulars Rs. Particulars Rs.

Gross Sales 7,50,000 Cash 11,000

Sales Return 10,000 Marketable securities 7,000

Net profit before tax 1,90,000 Accounts receivable 47,000

Interest expense 24,000 Inventory 50,000

Income tax rate 40% Net fixed assets 1,50,000

Current liabilities 55,000 Share capital 1,00,000

Long term liabilities 80,000 Profit and Loss 30,000

The company had issued 10,000 equity shares on 31st December 2009 . Market value per share on 31st

December 2009 was RS. 25.

Calculate:

i. Current ratio ii. Liquid ratio iii. Debt – equity ratio

iv. Earnings per share v. Interest coverage ratio vi. Price earning ratio

Question.No.5: A contractor makes up his accounts to December 31 in each year, contract no.534 commenced

on April 1, 2007. The cost records yield the following information on December 31, 2007.

Material Charged out to site 2,150

Labour 5,150

Foremen 631

A machine costing Rs.1,500 has been on site 73 days, Its working life is estimated at five years, its final scrap

value of Rs.100.A supervisor, who is paid Rs. 1,200 per annum, has spent approximately one half of his time on

this contract. All other expenses and administration expenses amounted to Rs.1,261. Materials in store at site at

year end cost Rs. 255.The contract price is Rs.20,000. On 31st December 2007 2/3 of the contract was

completed. Architects certificate has been issued covering Rs. 10,000 and Rs. 7500 has so far been paid on

account.

Required: Prepare a contract account and state how much profit or loss should be included in respect of

Contract No. 534 in the financial accounts to 31st December, 2001.

Question.No.6: A of Lahore consigned 500 radio sets costing Rs. 1000 each to B of Sialkot on 1st March 2004.

The expenses on consignment were freight Rs. 5,000 insurance Rs 2,500, carriage Rs 500.B received the

delivery of 470 radio sets. An account sale dated 30th June , 2004 showed that 395 sets were sold for Rs.

7,50,000 and B incurred Rs.2350 for carriage , Rs 6,705 for godown rent. B was entitled to a commission at the

rate of 6 % on sales. A lodged a claim with the insurance company which was admitted at Rs. 22500.

Required: Show the necessary accounts in the books of A.

Question.No.7: What are departmental accounts? Explain the basic of allocation of various expenses over various departments.

Question No 8: Discuss the factors, which should be considered while making the decisions regarding right issue of share.

BEST OF LUCKBEST OF LUCK

A contractor makes up his accounts to December,31 in each year, contract no,534 commenced on April 1, 2001. The cost records yield the following information on December 31, 2001. The cost of records yield the following information on December 31, 2001.

Meterial Charged out to site 2,150Labour 5,150Foremen 631A machine costing Rs.1,500 has been on site 73 days, Its working life is estimated at five years, its final scrap value of Rs.100A supervisor, who is paid Rs. 1,200 per annum, has spent approximately one half of his time on this contract.All over expenses and administration expenses amounted to Rs.1,261 Materials in store at site at year year end cost Rs,248.The contract price is Rs.20,000 On 31st December 2001 2/3 of the contract was so far been paid on account.Prepare a contract account and state how much profit or loss should be included in respect of Contract No. 534 in the financial accounts to 31st December, 2001.

Question No.6A Head office in Kohat has a Branch in Lala Musa to which goods are invoiced by the Head Office at Cost Price Plus 25%. From the following particulars show how the Branch account will appear in the Head Office Books (entries are to be made at invoice price.)Particulars Stock on 1st July 2001 (Invoice Price)Debtors on 1st July 2001Good invoice from Kohat Remittance to Kohat

Cash Sales Cash received from Debtors

Goods returned to Head OfficeCheques received from Kohat: Wages and salaries Rent, rates etc. Sundry expenses Stock on 31st December 2001 (invoice price)Debtors on 31st December 2001

Rs.

16,00029,500

11,0003,000510

Rs.12,50012,00040,000

45,5002400

14,51015,00022,500

BEST OF LUCK