Student Name: Akash Chaubey Reg. No.

1205023997 Subject: Computer Awareness and Internal

Course:B.Com LC Code:00918 Subject Code:BCC201

Q:-1 Discuss the manner in which the pricing of goods sent on consignment is done. Ans:-1 Goods can be consigned to the consignee either (i) at cost or (ii) at invoice

price. At cost:- In retail systems, the cost price represents the specific value that represents unit price purchased. This value is used as a key factor in determining profitability and in some stock market theories it is used in establishing the value of stock holding. Cost price is also known as cp. It is the original price of any item. The cost is the total outlay required to create a product or service. Cost price is used in establishing profitability in the following ways:

Selling price (Excl. Tax) less cost results in the profit in money terms. Profit / selling price (Excl. Tax) when expressesd as a percentage produces (Gross Profit) or GP% Expense / Net Sales yields a percentage which when used as the target margin will produce gross profit.

Actual Cost Actual Cost or Landed Cost In this calculation all expenses in acquiring an item are added to the cost of items to establish what the goods actually cost. Additions usually include freight, duty etc.. Cost This is the actual value of the item when last purchased. Normally expressed in units. Average Cost When new stock is combined with old stock, the new price often overstates the value of stock holding. The better method is to combine the total value of investment in stock, old and new and divide by the total number of units to calculate the average cost. This is a very accurate method of establishing stock holding. Moving Average Cost Moving average cost. (MAC) A slight permutation on the above, with the average being calculated from the previous average and new price. Net Realizable Value

Normally indicates the average value of an item in the marketplace. Often this cost is interchangeable with replacement cost. Q:-2 State the features of memorandum joint ventures method Ans:-2 Memorandum Joint Venture Method:- the following are the salient features of this methods: According to U.S. GAAP, joint ventures usually must use the equity method of accounting. The exception for using the accounting equity method would be unincorporated industries that require proportionate consolidation. Equity-method accounting offers the option to account for investments at fair value or cost value, and does not require uniform accounting policies between investor and investee. Special purpose entities, such as a joint venture, require the primary beneficiary, who holds the most amount of power and benefits, to consolidate the variable interest entities. IFRS Investments in joint ventures, as determined by IFRS, allow either the proportionate consolidation method or the equity method of accounting. Investors are usually required to use the equity method of accounting for their investments in consolidated financial statements. However, venture capital may use proportionate accounting for industries that require it, allowing separate financial statements presented by the controlling interest in the investment with subsidiaries' financial statements. Investments accounted for at either cost or fair value and uniform accounting are required. Power to control is determined by the party that owns more than 50 percent of the votes or potential voting rights. The controlling partner has the ability to manage the financial and operating policies of an entity to obtain benefits. Q:-3 Describe the concept of independent branches. Ans:3 Independent branches means a branch which maintain its own set of books. Such a branch can ethics be a home branch or a foreign branch. The method of accounting is the same in both the cases except that in case of a foreign branch, trail balance sent by the foreign branch is to be converted into the currencies of the country of the head office. The characteristics of the accounting system of an independent home branch can be summarized as follows.

JVA Journal EntriesJournal entries record the financial transactions in an organization's accounting system or books. There are two methods used for keeping the accounting books. Either the joint venture records journal entries in one consolidated book, or each party in the joint venture must keep separate books. The type of joint venture and investing parties will determine the best method for keeping the accounting books. Memorandum JVAUsing a memorandum joint venture account is another method to record the transactions in the books of the various parties. The joint venture account is prepared on a memorandum basis to determine the profit or loss, but is not a part of the financial books. Various transactions from all parties in the joint venture combine into a memorandum joint venture account. Each party debits or credits the memorandum joint venture account on its books, recording its share of the profit or loss. After each party's book is balanced, all balances should be reconciled by settling the differences between each party. This method is not keeping a double book, but is reconciling the accounting records kept between joint venture parties in order to present a consolidated financial statement. Monism is the position that mind and body are not ontologically distinct kinds of entities. This view was first advocated in Western philosophy by Parmenides in the 5th century BC and was later espoused by the 17th century rationalist Baruch Spinoza. Physicalists argue that only the entities postulated by physical theory exist, and that the mind will eventually be explained in terms of these entities as physical theory continues to evolve. Idealists maintain that the mind is all that exists and that the external world is either mental itself, or an illusion created by the mind. Neutral monists such as Ernst Mach and William James argue that events in the world can be thought of as either mental (psychological) or physical depending on the network of relationships into which they enter, and dual-aspect monists such as Spinoza adhere to the position that there is some other, neutral substance, and that both matter and mind are properties of this unknown substance. Q:-4 What do you mean by departmentalization of expenses. Ans:-4 In order to ascertain the profit or loss made by each department it is necessary that each departments is charged with a proper share of the various businesses. The followings bases may be adopted for departmentalization of such expenses. (i) Expenses incurred specifically for a particular department should be directly charged to the respective departments. If box examples there are separate electricity meters for each of the departments on the basis of electricity bills received by each one of them. Expenses which have been incurred for the business as a whole but are eapable of being appointed over different departments on such basis of course there are no hard and basis rules as regards the basis to be applied box appointment may be adopted:

(ii)

a) Departmental Wages:- Expences which directly vary with the department wages can be appointed on this bases: eg premium for workmens compensation insurance etc.

b) Capital Value of the Asset:- expenses such as depreciation of building, plant and machinery, fire insurance premium in respect of those asset etc. may be apportioned on this basis. c) Functional departmentalization - Grouping activities by functions performed. Activities can be grouped according to function (work being done) to pursue economies of scale by placing employees with shared skills and knowledge into departments for example human resources, IT, accounting, manufacturing, logistics, and engineering. Functional departmentalization can be used in all types of organizations. d) Product departmentalization - Grouping activities by product line. Tasks can also be grouped according to a specific product or service, thus placing all activities related to the product or the service under one manager. Each major product area in the corporation is under the authority of a senior manager who is specialist in, and is responsible for, everything related to the product line. LA Gear is an example of company that uses product departmentalization. Its structure is based on its varied product lines which include womens footwear, childrens footwear and mens footwear. e) Customer departmentalization - Grouping activities on the basis of common customers or types of customers. Jobs may be grouped according to the type of customer served by the organization. The assumption is that customers in each department have a common set of problems and needs that can best be met by specialists. The sales activities in an office supply firm can be broken down into three departments that serve retail, wholesale and government accounts. Q:-5 A colliery purchases a machine on the hire purchase system over a period of 5 years payable by annual installment of Rs. 10,000. The vendor charges interest @ 10% pa on annual balances. The cash value of the machine may be taken as present value of the annuity of Rs 10,000 for 5 years at 10% interest. Refrence of the annuity of Rs 1 for 5 years @ 10% pa is rs 3.791. you are required to calculate cash price and the amount of interest included in each installment. Ans:- in this case cash price of the asset can be calculated on the basis of the present value of the annuity of 1 rupee for 5 years at 10% which is 3,791 calculate as follows: Present value of Rs. 3,791 Hence present value of Rs 50,000 will be 50,000x 3.791/5 = 37.910 cash price of the machine is Rs 37.910 . the amount of interest can each years how be calculated as follows: Years Ist years Particulars Cash price outstanding Add: interest @10% P.A Less: 1st installment paid at the end of the year Rupees 37910 3791 41701 10000

2nd years

Amount o/s in the beginning of the year Add: interest @10% Ps Less: 2nd installment paid at the end of the year

31701 3170 34870 34871

3rd years

Amount o/s Add: interest @ 10% pa Less: 3 installment paid at the end of the year
rd

10000 24871 2481 27358 17358 1736 19094 10000 9094 906 10000 10000 NIL

4th years

Amount o/s in the beginning of the year Add: interest @ 10% pa Less: Installment paid at the end of the fourth year

5th year

Amo. o/s in the beginning of the year Add: interest @ 10% Pa Installment paid at the end of the 5th year

Q:-6 Prakash and Suresh doing business seperatly as building contractors undertake jointly to constract a building for a newly started joint stock company for a contract price of Rs, 1,00,000 payable as to Rs, 80,000 by instatement in cash and Rs, 20.000 in fully paid shares of the company. A bank account is opened in their joint names prakash paying in rs 50,000 and Suresh Rs 25,000. They are to share profit or loss in the proportion of 2/3 and 1/3 respectively their transaction were as follows: Paid wages Bought material Material supplied by Prakash from his stock Material supplied by suresh from his stock Artitect fees paid by Prakash 30000 40000 5000 4000 2000

The contract was completed and price duty received the joint venture was closed by Prakash taking up all the shares of the company at an agreed volution at rs. 16000

Prepare the joint venture account showing profit or loss and the account of Prakash and Suresh showing the final distribution. Ans:-6 PARTICULARS To Joint A/c(wages) To joint a/c(materials) Joint Venture Account Rs. bank 30,000 bank 40,000 5,000 4,000 PARTICULARS By Joint Bank A/c By Prakash(share) Rs. 80,000 16,000

To Prakash(materials) To Suresh (materials)

To rakish(Artichitect 2,000 fees) To Profit Prakash Suresh 10,000 5,000 15,000 96,000 96,000

JOINT BANK ACCOUNT PARTICULARS To Prakash To Suresh To Joint venture A/c Rs. 50,000 25,000 80,000 PARTICULARS By Joint venture A/c By Joint venture A/c By Prakash By Suresh 1,55,000 Rs. 30,000 40,000 51,000 34,000 1,55,000

PRAKASH ACCOUNT PARTICULARS To Joint venture A/c To Joint bank a/c Rs 16,000 51,000 PARTICULARS By Joint Bank A/c By Joint venture a/c By joint ventures a/c (architect fees) By joint ventures a/c Rs 50,000 5,000 2,000 10,000 67,000

67,000

SURESH ACCOUNT PARTICULARS To Joint bank a/c Rs 34,000 PARTICULRS By joint bank a/c By joint ventures a/c By Joint ventures a/c RS 25,000 4,000 5,000 34,000

34,000