J.K.K.

NATARAJA COLLEGE OF ARTS & SCIENCE

KOMARAPALAYAM
DEPARTMENT OF COMMERCE (CA)
MODEL EXAMINATION (APRIL2020)
FINANCIAL ACCOUNTING

Class: I-B.COM (CA) Semester: II

Time: 3 Hours Max.Marks:75 Marks

                                                       SECTION-A (15x1=15 )
 Choose the correct answer

1.From the accounting point of view branches may classified to

a) 4 b) 5 c) 3 d) 2

2 .The objective of branch accounting is to know. 

a) Real accounting  b) Branch accounting  c) keep track of company expanses d) minimize

company tax 

3.. ---------- method is used where the branch manager is not empowered to vary the selling price
fixed by the head office

a) debtors system b) stock and debtors system c) final account system

4. Selling expenses should be divided among the different  departmental on the basis of ?

a) death of the key executive of the business b) strike of the works  c) sales  d) None of the
options

5.Rent& Rate paid are apportioned between department  on the basis of

a) separate entity  b) space occupied  c) going concern d) materiality

6.Department accounts are prepared to know separately the ------------ of each department.

a) profit b) sales c) expenses

7.Single entry can be adopted by

a) Small firms b) Joint stock companies c) Registered co-operative societies

8.In case of net worth method of single entry, profit is ascertained by

a)Comparing the capital at the beginning of the accounting period and the capital at the end of
the accounting period b) preparing a profit and loss accountc) preparing a balance sheet
9.The amount of credit sale is ascertained by

a) Preparing total debtors account b) preparing trading account c) preparing statement

of affairs.

10. Profit and loss appropriation accounting shows

a) Nominal accounting  b) Agreed accent’s of interest capital and drawing on the salary’s on
partners c) personal   accounting  d)  Expense  accounting 

11.On the admission of a partner if the goodwill is raised at full value, it should be debited to

a) Cash account b) old partners capital account c) goodwill account.

12. In the case of the retirement of a partner, profit on revaluation is credited to the capital
account of the partners

a)equally b) in the profit sharing ratio c) in proportion to their capitals

13.Unrecorded liability paid at the time of dissolution is to be debited to ------------ account

a) Realization b) Revaluation c) debit

14.When the firm is dissolved, reserve fund is transferred to------------- in their profit sharing
ratio

a) Realization account b) partners capital/current accounts c) Goodwill account

15. The practice before Garner vs. Murray decision was to share the deficiency of the insolvent
partner by the solvent partner in their -------------ratio.

a) profit and loss sharing ratio b) debit c) credit

SECTION-B (5x2=10)

ANSWER ANY TWO QUESTIONS 

16.  Loyal shoe company opened a branch at Chennai  on 1.1.2012 prepare branch account for
the year 2012.

RS

Good sent to branch                                               15,000

Cash (expenses)                                                        6,000

Cash received from the branch                               24,000

Stock on 31.12.2012                                                 2,300

Petty cash on 31.12.2012                                        40

17. A company has two departments A and B. ‘A’ department supplies the goods to ‘B’
departments at its usual selling price. Front the following figures. Prepare Departmental  Trading
Account for the year 2015.

Dept. A (Rs)                 Dept. B (Rs)

Stock on 01.01.2015                     30,000 _

Purchases                                        2,10,000 _

Transfer to department B              50,000 -

Sales                                                  2,00,000 60,000

Stock on 31.12.2015                         40,000 10,000

13.Find out profit from the  following date RS

Capital at the beginning of the year                     8,00,000

Drawings during the year                                        1,80,000

Capital at the end of the year                                 9,00,000

Capital introduced during the year                           50,000

18. From the following information ascertain opening stock (i.e., 0n 1.1.96 )

RS

Purchases made during 1996                                2,50,000

Sales made during 1996                                        3,25,000

Stock on 31.12.1996                                                 60,000

Wages                                                                         3,000

Rate of gross profit on cost                                   25%                                                

19). X and Y are partners in a firm sharing profit and losses equally .On 1st January 1995 their
capitals were Rs .20,000 and Rs .10,000 respectively .Interest on capital is to be allowed at 5%
p.a.from   profit prior division thereof .
 The net profit for the year ending 31st December 1995 before allowing interest on capital
amounted to Rs. 9,500.

Give the journal entries and prepare profit &loss appropriation account as on 31st
December 1995,showing the division of profit between X and Y .

                                                        SECTION-C ( 5x10=50)

 Answer any FIVE question

20).(a) A head office invoices goods to its branch at cost price. The branch is permitted to incur
petty expenses and maintain petty cash balances of  Rs 1000 on the imprest system it also
permitted to by furniture of the value Rs 2000

                                                          Rs                                                                 Rs       

Stock 1.1.93                               41,000 cash purchases by branch 12,500

Debtors  1.1.93                          12,500 (with H.O. Permission)

Petty cash 1.1.93                      1,000 Payment to creditions        45,000

Creditors 1.1.93      10,000 Closing balance of Creditors A/c 27,500

Rent upto 31.3.93                          250 payment by H.O

Goods sent to branch              75,000 Rent for one year               1,200

Credit sales                                40,000 (paid on 1.4.93) 

Cash sales                                  75,000 Salaries        6,000

Cash received from debtors 45,000 Insurance (paid upto 31.3.94)

payment by branch 

Discount                                         100 Furniture       2,000

Bad debt                                         150 Petty expenses     250

                                                                          Stock on 31.12.93                   1,00,000

     Prepare Branch A/c in the Books of Head Office. 

(OR)

b) explain the types of branch accounting

21.(a) From the following, prepare departmental  trading and profit & loss A/C in the columnar
from the three departments of Sharma dry cleaners ltd

                              

Dry cleaning Rs   Darning Rs Dyeing Rs

 Stock 1st jan.1996             4,00,000 3,40,000 9,40,000

Stock 31st dec.1996                       3,30,000 4,38,000 8,17,000

Purchases                                    19,59,000 6,97,000 13,73,000

Sales                                            40,00,000 20,00,000 40,00,000

Wages                                              72,28,000 3,00,000 2,46,000

Goods  were transferred from one department to another at the cost price as follows:

1) Darning   to dry cleaning Rs2,400 and to dyeing Rs .40,200

2) Dyeing to dry cleaning Rs.25,800 and  to darning Rs.18,000
3) Dry cleaning to darning Rs.3,000 and to the dyeing Rs.24,000

Apportion equally: 
Stationery                                                      Rs. 5,418
Postage                                                           Rs. 4,050
General expenses                                           Rs.2,37,618
Insurance                                                         Rs. 10,080
Depreciation                                                     Rs. 32,598 
Rent &taxes Rs .1,80,000 is to be spilt in proportion to space occupied ,I .e.,dry cleaning
4, darning 2, dyeing 2 and other space 2.
(OR)

(b).Mehta Ram of  Ram Nagar purchased goods for this three departments as follows.

          Dept    X - 200 units 

          Dept    Y -   1,400 units

          Dept    Z - 400 units

Sales of the three departments were as follows.

          Dept  X - 180 units        @Rs.15 per unit 

          Dept  Y - 1,500units      @Rs.18 per unit

          Dept   Z – 450 units        @Rs.6 per units 

Other information about stock in the beginning was as follows.

         Dept  X -100 units 

          Dept  y -400 units 

          Dept  z - 60 units 

Mehta Ram informs you that the rate of gross profit is the same in all departments.

You are required to prepare departmental trading A/c.

22 (a). Following is the position of assets and liabilities of Mr.Arumugam who keeps his book by
single entry: 

                                  January 1,2016 (Rs)                    December(Rs)

Debtors                      5,300                 8,800

Creditors                    1,500                 1,950

Stock                           1,700             1,900

Fixed assets               2,140                    1,740

Additional information :

Total sales (including cash sales Rs.  500) Rs. 10,000  

Total purchases (including cash purchases Rs.  2,050 ) Rs. 4,500

Payment for fixed assets Rs.  500

General Expenses Rs.1,000

Drawings Rs.  300

Cash in Hard at the end Rs.  410  

Stock of Rs. 500 was used by the proprietor for his personal use. Allow interest on capital at 5%
per annum. Prepare trading and profit and loss account for the year ending December  31,2016
and a Balance Sheets as on that date.   

(OR)

(b). Distinguish between single entry system and double entry system.
23.(a). The Balance Sheet of Padma and Renuka on 31st March 2000  is set out below.

They share profits and losses in the ratio of 3:1

           Liabilities                   Rs. Assets                             Rs

Capital  :                             

          Padma                       40,000 Land &Building          30,000

          Renuka                      30,000 Furniture                        2,000

General Reserve                20,000 Stock                           8,000

Sundry Creditors                20,000 Sundry Debtors           60,000

                                                                     Cash                                 4,000

                                                                     Profits & loss A/c           6,000

                                               1,10,000                                               1,10,000

They agreed to admit Kavitha into the firm, subject to the following terms and conditions :

i)  She will be entitled to one –fourth share of the profit 

ii) She will bring in Rs.  21,000 of which Rs. 10,000 will treated as her share of good will to be
retained in the business.
iii) Depreciation is to be provided on furniture @15%
iv) Stock to be revalued at Rs.6,500 
v) 50% of general reserve is to remain as a provision for bad and doubtful debts.
Give journal entries to effect to these arrangement and contrast the balance sheet of new
firm.

(b). what is ‘Admission of partner ‘? Explain the matters to be deal with at the time of admission
of new partner .

24 (a). A ,B ,C and D were partnership their profit sharing ratio was  3:2:3:2. Their balance
sheet on the date of dissolution was as follows.  

          Liabilities                   Rs. Assets               Rs.

  A’s  capital                                 20,000 Assets 34,000

   B ‘s capital                                   5,000 C’s capital 12,720

Reserve fund                   4,000 D’s capital  3,280

 Creditors                          6,000

                                           50,000                                      50,000

O n the above date c become insolvent and was able to contribute only 50 paise in a rupee.
Assets realized Rs.25,000.Realised expenses amounted to Rs.800. Make ledger Accounts.

(OR)

(b).  A, B and  C are equal partners in a firm and on 31st Dec. 2000,  their Balance Sheets stood
as follows.

       Liabilities                                 Rs. Assets           Rs

Creditors                            10,000 Bank                           200

Bills payable                         3,200 Debtors                 16,000

General Reserve                  9,000 Stock                        25,000

Capital Accounts :                                                Bills Receivable 5,000

           A                                21,000 Machinery                 15,000

           B                                13,000 

           C                                   5,000 

                                              61,200                                                        61,200           

‘C’ Became  insolvent and his private estate could pay only Rs.  100 the firm was dissolved .
Assets realized Rs.31,000.   Realisation expenses came to Rs.100 . prepare necessary ledger a/c
to close the books of the firm .(Apply GARNER Vs.MURRAY   rule.)