INSTITUTE OF MANAGEMENT STUDIES (DAVV, Indore) Expenses 100000

MBA (Financial Administration) Semester I Sales 250000

MS5C-505- FINANCIAL ACCOUNTING Capital 140000
(3rd Internal) Max. Marks: 20
Total 495000 495000
Note -Attempt Four questions as per assigned scheduled as per new roll number.
1. Explain the Accounting Conventions and Accounting Principles for record of 8. From the following particulars, prepare Trading and Profit and Loss Account and
books. Balance Sheet for the year ending 31Dec20.
2. Difference between Capital and Revenue Expenditure. Opening Stock 8500 Creditors 19500
3. Define the term: a-Business, b-Historical Cost Concepts, c-Owner, D-Bad debts, E- Purchases 45750 Sales Returns 2300
Prudence Concept. Salaries 6400 Repairs 700
4. Define Depreciation & Necessity of Depreciation as per Tax aspects. Wages 3350 Loan 25000
5. Define Statutory reporting, described the Various factors affecting financial Premises 46000 Purchase Returns 500
reporting. Plant 20000 General charges 350
6. Vinod commenced business on Ist Jan.,2020 as a book seller with capital of Rs. Furniture 2550 Taxes 1450
10,000. The following transactions took place during the month Freight on Sales 2400 Sales 80500
Jan. 2 Goods purchased for cash 4,000 Carriage Inwards 350 Bills Payable 4500
4 Purchased furniture 1,000 Customs Duty 2700 Insurance 450
Sold goods to Prakash 800 Bad Debts 1000 Discount Dr. 250
5 Sold goods to Pradeep for cash 1,200 Debtors 32000 Capital 50000
9 Received cash from Prakash in full settlements 780 Bills Receivable 3500
10 Purchased goods from Ashok 2,500 a) Stock at the end of the year Rs. 13750
12 Purchased Almirahs from Prasad for cash 1,200 b) Depreciation charged @2.5% on Premises and Furniture @10%.
19 Paid to Ashok 2,400 c) Custom Duty paid in Advance Rs. 700.
Received discount from him 100 d) Freight on sales outstanding Rs. 600.
22 Withdraw cash for personal use 400 e) Make A reserve for Bad and doubtful debts Rs. 2000
Withdrew goods for personal use 150 9. A Company purchase a second-hand machinery on 1st January, 2020 for Rs.
27 Sold goods to Shukla 2,250 37,000 and spent Rs. 2,000 on its repairs and Rs. 1,000 on erection. On 1st July
30 Received cash from Shukla 2,250 2021 it purchased another machine for Rs. 20,000 and on 1st July, 2022 it sold the
31 Paid Salaries to manager Mohan 350 first machine which was purchased on 1st January, 2020 for Rs. 35,000. On the
Paid Wages 125 same date it purchases a new machine for Rs. 60,000. On 1st July, 2023 the second
Paid shop rent 400 machinery which was purchased On 1st July 2021 for Rs. 20,000 was also sold for
Record the above transaction in Journal & Ledger. Rs. 8,000.
7. From the information, prepare Correct Trial Balance. Depreciation was provided on machinery at the rate of 10% p.a. on the original
Particulars Dr. Amount Rs. Cr. Amount Rs. cost annually on 31st December, in year 2021, however the company changed the
method of providing depreciation and adopted the written down value of method
Cost of goods sold 150000
@ 15% p.a. Give Machinery Account for four years commencing from 1st Jan.
Closing stock 40000 2020 to the end of 2023.
Debtors 55000 10. Prepare a Machinery Account of a production company for the year ending on
Creditors 75000 0 2020 and 2021.
o Balance of machinery account on 1st January 2020 was Rs. 28,540.
Fixed Assets 120000 o On 1st April, 2020 some plants having the value of Rs. 2,160 on 1 st Jan 20,
Opening stock 60000 were sold for Rs. 820.

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 o Same day on a new machine is purchased at Rs. 8,580. Installation and other Insurance 6800
charges were Rs. 150 and Rs. 70 respectively. Land and Buildings (Cost Rs. 2,00,000) 150000
o On 1st July 2021 they purchased new machinery costing Rs. 8,600.
Company charges deprecation on new machine @ 10% per annum and old Furniture (Cost Rs. 10,000) 7000
machine @ 15% per annum using diminishing balance method. Leasehold Premises (Lease to expire on 31st Dec. 2025) 75000
11. The following is a receipt and payment account of Ram Club, on 31Dec1999.
Sundry Debtors 120000
Receipts Amount Payments Amount
To Balance b/d (1.1.1999) 2,050 By Salaries 2,200 Sundry Creditors 40200
To Subscriptions: By Printing Material 800 Shares in Subsidiary Company 8000
1988 180 By Tax 1,200 Called up Capital 300000
1999 4,220 By Telephone charges 2,200
2000 60 By Furniture 2,500 Bills Receivable 37500
To Income -tournament 2,140 By Sundry Expenses 1,850 Advances against purchases of goods 8900
To Life member fees 3,000 By Balance c/d 900 Profit & Loss Account 120490
11,650 11,650 Overdraft from Bank (Secured against Land and
Additional Information: - 160000
Buildings)
A. The Club has 500 members who pay annual subscription of Rs. 10 each At the
Equity Shares Call Account 500
beginning of 1999, outstanding subscription for 1998 was Rs. 90.
B. The stock of Printing Material on 31.12.98 was Rs. 100 and on 31.12.99 was 6% Debentures 50000
Rs. 180. Prepaid Insurance 1200
C. Tax Paid on 31 Dec, 99 Rs. 1200 per annum was paid upto 31st March, 2000. Discount on Issue of Debentures 1000
A. Telephone charges for 3 months are unpaid, Rs. 70.
D. Sundry expenses outstanding on 31.12.99 amounted to Rs. 140. 1033700 1033700
E. The value of building in the books on 31.12.98 as Rs. 30,000 which was to be The capital of company is under as under:
depreciated 7% per annum. (1) 750, 5% Preference Shares of Rs. 100 each.
F. Investment as on 31.12.98 were Rs. 40,000. (2) 3000 Equity Shares of Rs. 100 each allotted and called up Rs. 75 per Share.
Prepare Income and Expenditure account & B/s for the year. The Directors decided to write off the accumulated loss upto end of the previous year
12. The following is the Trial Balance of Ahmadabad Sundry Products Limited as on by adopting the following scheme duly accepted by the shareholders and approved by
31st December 2005. court:
Purchases 315000 The Preference Shares were subject to a reduction in value of Rs. 50 per share, The
Equity Shares were to be considered as paid up to Rs. 40 per Share, Surplus if any was
Sales 483500 to be carried to General Reserve.
Opening Stock 40580 Other information: (a) Stock in hand Rs. 50820. (b) Bills under discount Rs. 6500. (c)
Wages 50250 The new manager is to paid commission at 10 per cent of net profit, if any.
On the basis of above particulars prepare final accounts of Ahmadabad Sundry
Manufacturing Expenses 27570
Products Limited.
Freight 10560
Interest on Debentures 1500
Salaries 28500
Depreciation 7800
General Expenses 15550

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