HI-AIMS COLLEGE OF COMMERCE AND MANAGEMENT SARGODHASENDUP EXAM 2014, B.Com Part-II

Paper: Advanced Accounting Total Marks: 100

Paper Code:BC 401 Time Allowed: 3hrNote: 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 1st 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 annum

v. 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 capital

Purchases 500,903 (60,000 equity shares of Rs. 10 each) 600,000

Manufacturing expenses 202,800 General reserve 250,000

Establishment expense 36,814 Unclaimed dividend 6,526

General charges 31,078 Trade creditors 36,974

Machinery 200,000 Sales 983,947

Motor vehicles 95,000 Depreciation reserve 71,000

Furniture 15,000 Interest on investments 8,544

Opening stock 172,058 Profit & Loss A/c 1st January 2011 16,848

Debtors 148,380 Staff provident fund 37,500

Investments 288,950

Cash 72,356

Director’s Fees 18,000

Interim dividend 45,000

Repairs & Renewals 10,000

20,11,339 20,11,339

Adjustments:-

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.

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

Roll no________

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 2,150

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 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.6

A 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 2001

Good invoice from Kohat

Remittance to Kohat

Cash Sales

Cash received from Debtors

Goods returned to Head Office

Cheques received from Kohat:

Wages and salaries

Rent, rates etc.

Sundry expenses

Stock on 31st December 2001 (invoice price)

Debtors on 31st December 2001

Rs.

16,000

29,500

11,000

3,000

510

Rs.

12,500

12,000

40,000

45,500

2400

14,510

15,000

22,500

BEST OF LUCK