Actual Turnover from 1st Feb to 30th June 2017 80,000 T/o from 1st Feb to 30th June

0th June 2016 2,00,000

Turnover from 1st Feb 2016 to 31st Jan 2017 4,50,000 Net Profit for last financial year 70,000

Insured Standing Charges for last financial year 56,000 Total Standing charges for last financial 64,000
year
Turnover for the last financial year 4,20,000

1)
2) A fire occurred on 1st Feb, 2017 in the premises of Uzma Ltd., a retail
store, and business was partially disorganized up to 30 th June 2017.
The company was insured under a ‘loss of profit’ for Rs.1,25,000 with a
six months period indemnity. From the following information, compute
the amount of claim under the loss of profit policy. (all figures in Rs.)

The company incurred additional expenses amounting to Rs.6,700 which

reduced the loss in turnover. There was also a saving during the indemnity
period of Rs.2,450 in the insured standing charges as a result of fire.

There had been a considerable increase in trade since the date of the last
annual accounts and it has been agreed that an adjustment of 15% be made
in respect of the upward trend in turnover. (12marks)

3) Prepare Consignment account in the books of M/s Altaf Raja of Haddi

Bagan as on 31st Dec, 2015 from the following particulars given below :
On 1.1.2015, M/s Altaf Raja of Haddi Bagan consigned 20,000 kg of a
particular variety of goods to M/s. Shahzeb of Jannagar Road at a cost
of Rs. 120 per kg and paid Rs. 1,20,000 on insurance and freight. 400
kg of the item was lost in transit. M/s. Shahzeb took delivery of the
remaining goods consigned and paid unloading charges of Rs.38,000.
Printing and Advertisement expenses were Rs. 40,000 and godown rent
Rs.5,000. 450 kg was lost due to leakage in the godown of M/s.
Shahzeb (which was considered as normal loss). 16,600 kg of the
goods consigned was sold by M/s. Shahzeb @ Rs.150 per kg.
Commission @ 10% on sales is payable to M/s. Shahzeb.
(12 marks.)

Bachelor of Commerce (1st Semester)

 Financial Accounting
Full Marks : 80
Time Allowed : 3 hours
Dated : 15th December, 2019

(Question 1 is compulsory and answer any 5 questions out of 6 questions.)

1a) The following is the Trial Balance of Mr. Asif as at 31 st March, 2017:

Debit Balances Credit Balances

Drawings 10,000 Capital 1,70,000

Office Equipment 1,10,000 Sales 1,65,000

Purchases 84,000 Returns 4,000

Returns 5,000 Bad Debt Recovered 26,450

Bad Debts 5,000 Discount Received 1,000

Carriage Inward 5,000 Creditors 2,02,000

Carriage Outward 7,000 Bills Payable 5,600

Discount Allowed 2,000 Bank Overdraft 29,000

Sales Commission 4,000 10% Loan 30,000

( taken on 1.4.2016 )

Rent 4,000

Interest 1,500

Office Expenses 16,000

Debtors 2,15,000
B/R 10,000

Investment 50,000

Opening Stock 54,000

Cash 50,550

6,33,050 6,33,050

Additional Information :

 Closing Stock at market price as on 31st March, 2017 was Rs.61,500.

However, the cost of such stock was Rs.80,000.
 Provide for depreciation on Office Equipment @ 10% p.a.
 Goods costing Rs.10,000 was destroyed due to fire on 30th March,2017,
the insurance company accepted a claim to the extent of 60% only and
paid the claim money only on 10th April, 2017.
 Of the bills receivables, a bill of Rs. 4,000 is dishonoured. No entry has
been made in the books of account.
 Write off Rs. 9,000 as bad debt and maintain a provision for bad debt @
5%.
 Manager is entitled to a commission of 5% of net profit before charging
his commission.

You are required to prepare Trading and Profit and Loss Account for the
year ended on 31st March, 2017 and a Balance Sheet as on that date.(15
marks)

1b) On 1st Nov, 2017 M/s Uzaifa Ltd sent goods valuing Rs. 1,50,000
at invoice price to the customers on sale or return basis. On 10 th Dec,
goods worth Rs. 40,000 were returned by the customers. On 23 rd Dec,
intimation was received that goods worth Rs. 80,000 has been accepted
by the customers but at a reduced price of 5% which was agreed by the
M/s Uzaifa Ltd. The customers could not yet decide anything about the
rest of the goods.

Show the journal entries in the books of M/s Uzaifa Ltd at the end of
financial year 31st Dec, 2017. Goods are invoiced to the customers at 25%
above cost. (5 marks)
 4a) From the following particulars, prepare Sales Ledger Adjustment
Account and Bought Ledger Adjusment Account in the General Ledger :

Dr. Cr.

Balances on Bought Ledger 10,000 96,000

Balances on Sales Ledger 1,41,000 2,250

Transactions during the year 2019 :

Amount

Purchases 5,40,000

Purchases return 20,000

Total Sales 9,68,000

Cash Sales 40,000

Sales return 10,000

Cash received from customers 6,24,000

Discount allowed 11,200

Cash paid to suppliers 4,80,000

Provision for bad debts 9,000

Discount received 7,200

B/R received 40,000

B/P issued 22,400

B/R dishonoured 6,000

Closing bought ledger balance (Dr.) 10,400

Closing sales ledger balance (Cr.) 13,200

(8 marks)

4b) At 31st March, 2017 , the accountant of Rahila & Co. has failed to
balance his books of accounts. The difference has been carried to suspense
account. Subsequently, the following errors are discovered before
finalization of account. Give journal entries to rectify these errors.

 Cash discount allowed for Rs. 600 and discount received for Rs. 400
have been posted to the wrong sides of the discount account in the
ledger.
 An amount of Rs. 2,000 withdrawn by the proprietor for his personal
use had been debited to Travelling expenses account.
 Return inward book was overcast by Rs. 300.
 A cheque for Rs. 3,456 received from Mr.P after allowing him a
discount of Rs. 46, was endorsed to Mr.N in full settlement for Rs.
3,500. The cheque was finally dishonoured but no entries for dishonour
were passed in the books. (4 marks)

5a) Aqsha Limited follows the FIFO method of inventory valuation. The
following particulars are available in respect of an item of raw material for
the month of January 2019.

Jan 1 Opening balance 2,500kg @ 18 / kg Jan 22 Issues 7,000kg

Jan 4 Purchases 3,000kg @ 20 / kg Jan 28 Purchases 2,000kg @ 22 / kg

Jan 6 Issues 5,000kg Jan 31 Issues 4,500kg

Jan 18 Purchases 10,000kg @ 21 / kg

Calculate the cost of closing stock on the basis of FIFO method. (5

marks)

5b) On 1.1.2010 Machinery was purchased by Shamira for Rs. 80,000. On

1.7.2011 additions were made to the extent of Rs.14,000. On 1.4.2012 further
additions of Rs. 8,200 were made.

On 30th june , 2013 machinery, original value of which was Rs.12,000 on

1.1.2010 was sold for Rs. 10,000. Depreciation is charged at 10% p.a. on
original cost.

Show the machinery account for the years from 2010 to 2013 in the
books of Shamira who closes her books on 31st December every year. (7
marks)
6) Mrs. Zoiba kept no books of accounts for her business. An analysis of
her rough cash book for the calender year 2013 shows the following
particulars :

Receipts Rs. Payments Rs.

Rcvd from Drs 80,000 Overdraft on 1.1.2013 5,000

Further capital introduced 10,000 Paid to Crs 42,000

Business expenses 12,000

Wages paid 17,500

Proprietor’s Drawings 5,000

Balance at Bank on 6,500

31.12.2013

Cash in hand on
2,000
31.12.2013

90,000 90,000

The following particulars are also available : 31.12.2012 31.12.2013

Debtors 60,000 90,000

Creditors 20,000 22,500

Stock in trade 16,000 18,000

Plant & Machinery 30,000 30,000

Furniture 2,000 2,000

All her sales and purchases were on credit. From the above particulars,
prepare Trading & P/L A/c for the year ended 31st Dec, 2013 and a Balance
Sheet as at that date. Provide depreciation on P & M @ 10% p.a. and on
Furniture @ 5% p.a. (12 marks)

7) Answer any 4 questions :

1. What is GAAP ?
2. What is fair Value ? What are the features of fair value accounting ?
3. What are the main functions of Accounting Standard Board (ASB) ?
4. What are the benefits of achieving the convergence with IFRS ?
5. State whether the following are capital, revenue or deferred revenue
expenditure.
 Carriage of Rs. 7,500 spent on machinery purchased and
installed.
 Construction of basement costing Rs. 1,95,000 at the factory
premises.
 A sum of Rs. 400 was spent on painting the factory.