Credit Based IV Semester B.Com. Examination, September 2022
(2019-20 and Earlier Batches) Financial Accounting – iv Time : 3 Hours Max. Marks : 120
Instruction : Provide working notes wherever necessary.
SECTION – A
Answer any four questions : (4�6=24)
1. Write a note on shortworkings and recoupment of shortworkings.
2. What are the features of independent branch ?
3. How do you allocate the following items in departmental accounts ?
a) Packing charges b) Import duty c) Factory rent d) Carriage outwards e) Depreciation on machinery f) Canteen expenses.
4. Ramesh underwrites the new issues of Vijaya Ltd., to the extent of 20,000 shares of ` 10 each. The agreed commission was 6% payable as to 60% in cash and the rest in fully paid share. The public subscribed 8,000 shares and the balance had to be taken up by Ramesh. Show Journal Entries for the above.
5. Pass the adjusting entries in the books of the Head Office for the following transactions : a) Goods amounting to ` 1,000 transferred from Udupi branch to Hubli branch. b) Rent ` 500 of the branch paid by the Head Office. c) Goods in transit ` 800 at end of the year. d) Depreciation ` 500 on branch fixed assets when such account are kept in the Head Office book. P.T.O. BCMCMC 260 -2- *BCMCMC260* 6. From the following information prepare minimum rent account. Year Royalty in ₹ 2019 80,000 2020 1,00,000 2021 1,05,000 Minimum rent is ` 1,20,000.
SECTION – B
Answer any four questions : (4�12=48)
st 7. Ravi Company leased a colliery on 1 January, 2018 at a minimum rent of ` 25,000 p.a. merging into a royalty of ` 10 per ton with a power to recoup short-working over the first three years of the lease. The output of the coal mine are Year Royalty in ₹ 2018 1,500 2019 1,750 2020 3,000 2021 3,500 Prepare : a) Royalty Account b) Shortworkings Account c) Landlord Account.
8. Sanvi Ltd. invoices goods to its branch at Udupi at cost. From the following particulars for the year ending 31st December, 2021, prepare Branch account and Debtors A/c in the books of Head Office. Balance as on 1-1-2021 ₹ Branch stock 12,000 Petty cash 150 Branch debtors 3,200 Cash sales 64,000 *BCMCMC260* -3- BCMCMC 260
Cash sent to branch for
Rent 2,400 Salaries 7,200 Petty cash 1,500 Credit sales 32,000 Goods sent to branch 80,000 Cash received from debtors 30,000 Goods return by branch 500 Balance as on 31-12-2021 Branch stock 11,500 Petty cash 155 Branch debtors ?
9. Following is the Trial Balance of Delhi branch as on 31st March, 2022 :
Particulars Debit (₹) Credit (₹) Chennai Head Office A/c 32,800 – Stock on 01-04-2021 55,000 – Purchases 1,80,000 – Goods received from H.O. 93,000 – Sales – 3,90,000 Goods supplied to H.O. _ 55,000 Salaries 14,600 _ Debtors 37,000 – Creditors _ 13,500 Rent 9,600 – General expenses 4,700 – Cash at Bank 17,800 – Furniture 14,000 – 4,58,500 4,58,500 BCMCMC 260 -4- *BCMCMC260* The stock on 31-03-2022 was valued at 30,000. The Branch A/c in the Head Office Books on 31-03-2022 stood at ` 5,000 (debit). On 28-03-2022 Head Office forwarded goods to the value of 26,000 to the branch which were received by the branch on 03-04-2022. Prepare Branch Trading and Profit and Loss A/c and Branch A/c in the Books of Head Office.
10. Following is the Profit and Loss Account of Sakshi Ltd. for the year ended 31st March, 2022. Particulars ₹ Particulars ₹ To Purchases : Dept. A 1,50,000 By Sales : Dept. A 1,70,000 Dept. B 1,30,000 Dept. B 1,40,000 Dept. C 85,000 Dept. C 40,000 To Salaries and wages 48,800 By Closing Stock : To Rent 10,000 Dept. A 60,200 To Sundry expenses 11,100 Dept. B 19,900 To Profit 40,100 Dept. C 44,900 4,75,000 4,75,000
Additional Information : a) Dept. A and B are sales departments located at showroom and Dept. C is a production department. b) Apportion salaries and wages at 30% to production department and 70% to showroom. c) Showroom salaries and wages are to be divided in 1 : 2 ratio between A and B departments. d) Rent of production department is ` 5,000, rent of showroom is apportioned equally between A and B departments. e) Sundry expenses are apportioned in the sales ratio of the departments. Prepare departmental Trading and Profit and Loss Account. *BCMCMC260* -5- BCMCMC 260
11. Madhav Industries Ltd., issued 12,000 equity shares of ` 10 each at a premium of ` 1 per share. The whole issue was underwritten by underwriters M, N and O as follows : M – 5000 shares (Firm underwriting 2000 shares) N – 4000 shares (Firm underwriting 2000 shares) O – 3000 shares (Firm underwriting 1000 shares) Applications were received for 10000 shares of which marked applications were : M – 3000 shares N – 2000 shares O – 2000 shares The underwriters were entitled to a commission of 5%. Calculate each underwriter’s liability and pass Journal entries.
12. Pavani Ltd., operates a branch at Mysore. Goods are invoiced to the branch at cost plus 25%. From the following particulars prepare Mysore Branch A/c in the books of Head Office. Balances on 01-04-2021 : ₹ Branch stock 1,60,000 Petty cash 5,000 Branch debtors 85,000 Furniture 20,000 Cash sales 5,80,000 Total sales 8,80,000 Cash from debtors 2,90,000 Goods sent to branch 8,50,000 Discount allowed 2,500 Goods returned by branch 11,000 Goods returned by debtors 5,000 Expenses paid by Head Office : Rent 24,000 Salary 42,000 Branch stock on 31-03-2022 1,20,000 Petty expenses 3,600 It is required to write-off depreciation on Furniture at 10% p.a. BCMCMC 260 -6- *BCMCMC260* SECTION – C
Answer any two questions : (24�2=48)
13. Avish obtains a lease from Suhas to work a mine, the terms being a royalty of ` 5 per ton merging into a minimum rent of ` 50,000 p.a., there being granted to the lessee the right to recover shortworkings during the first four year of the lease. Avish sub-leases a part of the property to Kunal, the terms being a royalty of ` 7 per ton merging into a minimum rent of ` 30,000 p.a. Kunal has the right of recovery in the two years following the shortworkings. The production was as under : Year Avish Kunal (tons) (tons) 2017 5000 1000 2018 6500 2000 2019 8900 3400 2020 9800 5300 2021 10000 5800 Prepare necessary Ledger Accounts in the books of Avish.
14. The Head Office of a Company at Mumbai sends goods to Mandya Branch at selling price which is cost plus 25%. The following relate to the branch for the year ended 31-03-2022. ₹ Opening stock (Invoice Price) 40,000 Opening debtors 21,000 Opening fixed assets 25,000 Goods sent to Branch (Invoice price) 1,30,000 Returns to Head Office 6,000 Remittance to Branch for expenses 14,000 Total sales 1,57,000 Credit sales 1,06,000 Received from debtors 95,000 Discount allowed 6,000 Bad debts written off 2,500 Depreciation on fixed assets 3,500 Surplus in stock 1,500 Prepare Branch Stock A/c, Branch Debtor A/c, Branch Expenses A/c, Branch Adjustment A/c, Branch Profit and Loss A/c. *BCMCMC260* -7- BCMCMC 260 15. Yash Ltd. has its independent branch at Mysore. The following are the balances appearing in the books of the Head Office and the branch as on 31st March, 2022. Debit Head Branch Credit Head Branch Office Office ₹ ₹ ₹ ₹ Cash in hand 8,000 2,500 Share capital 2,00,000 – Opening stock 52,000 29,500 Discount 2,000 1,000 Salaries 30,000 12,000 Sales 4,50,000 1,48,000 Wages 1,25,000 48,000 Creditors 30,000 5,000 General expenses 20,000 5,000 Purchase returns 5,000 1,000 Purchases 1,55,000 80,000 Head Office A/c – 56,000 Goods received Goods sent to from Head office – 15,000 branch 15,000 – Rent 6,000 4,000 Branch A/c 56,000 – Debtors 40,000 15,000 Plant – Head office 1,50,000 – Branch 60,000 – 7,02,000 2,11,000 7,02,000 2,11,000 Closing stock : Head Office ` 42,000, Branch ` 30,000. Depreciation on plant : Head office ` 31,550, Branch ` 10,550. Rent outstanding : Branch ` 600. From the above prepare columnar Trading and Profit and Loss Account of Mangala Ltd. and its branch and a Consolidated Balance Sheet. Give Journal Entries to Incorporate Branch items in the books of the H.O.
16. From the following Trial Balance of Acharya Ltd., prepare Departmental Trading and Profit and Loss A/c and Balance Sheet for the year ended 31-12-2021 :
Dr. (₹) Cr. (₹)
Stock on 1-1-2021 : X Dept. 1,75,000 – Y Dept. 1,46,000 – Purchases : X Dept. 3,55,000 – Y Dept. 3,00,000 – BCMCMC 260 -8- *BCMCMC260* Sales : X Dept. – 6,00,000 Y Dept. – 4,00,000 Wages : X Dept. 82,000 – Y Dept. 22,000 – Rent 93,900 – Sundry expenses 36,000 – Salaries 30,000 – Lighting 21,000 – Discount 22,200 6,500 Advertising 36,600 – Carriage inward 23,600 – Furniture 30,000 – Plant 2,10,000 – Debtors and Creditors 60,600 3,06,500 Capital – 4,76,000 Drawings 45,000 – Cash at bank 1,00,100 – 17,89,000 17,89,000 Adjustments : i) Internal transfer of goods from Dept. X to Dept. Y ` 4,200. ii) The items rent, sundry expenses, lighting, salaries and carriage inwards to be apportioned in 2 : 1 ratio to Dept. X and Dept. Y. iii) Advertising is to be apportioned equally. iv) Discounts are to be apportioned on the basis of sales and purchase (excluding transfer). v) Depreciation at 10% p.a. on furniture and plant, to be charged to Dept. X, Dept. Y in 3 : 1 ratio. vi) The stock at 31-12-2021 Dept. X ` 1,67,400 Dept. Y ` 1,20,500 ________________
