Sr. No.

of Question Paper: Roll No………………

Subject Code : A102
Name of the Paper : Financial Accounting
Name of the Course : BCOM(P) 1st Year

Duration : 2 hours
Maximum Marks : 75
Instructions for Candidates
1. Write your Roll No. on the top immediately on receipt of this question paper.
2. Attempt any four questions.
3. All questions carry equal marks
4. Answers may be written either in English or in Hindi; but the same medium
should be used throughout the paper.

Q1. W, X and Y were partners in a firm. Z, a minor, was admitted to the benefits of
partnership firm. The share of Z was 1/5 and W, X and Y were to share the profits in the ratio
of 2:1:1. The following is the Balance Sheet as at 31st March 2020, the date of dissolution:
Balance Sheet as at 31st March 2020
Equity and Liabilities ₹ Assets ₹
Creditors 3,20,000 Bank 20,000
Capital Accounts: Other assets 5,80,000
Profit and Loss
W 1,00,000 Account 40,000
X
80,000
Y
20,000
Z 1,20,000 3,20,000
Total 6,40,000 6,40,000

Y is insolvent and a dividend of 40% was realized from his estates. Other estates realized ₹ 4,
60,000 and creditors were settled for ₹ 3, 00,000. Realization expenses amounted to ₹ 4,000.
Prepare the necessary ledger accounts to close the books of the firm.

Q2. Following is the trial balance of M/s Garima Traders as at 31st March 2020:

Particulars Dr. (₹) Cr. (₹)

Garima's Capital - 2,16,000
Opening Stock 93,600 -
Sales return and sales A/c 17,200 5,79,200
Purchases and Purchases return A/c 4,86,200 11,600
Freight and Carriage A/c 37,200 -
Rent and Taxes A/c 11,400 -
Salaries and Wages A/c 18,600 -
Sundry Debtors A/c 48,000 -
Sundry Creditors A/c - 29,600
 Bank Loan (12% p.a.) A/c 40,000
Bank Interest A/c 3,800 -
Printing and advertisements A/c 20,200 -
Drawings A/c 20,000 -
Income from investments - 500
Cash at bank A/c 23,000 -
Discount Received A/c - 8,560
Investments A/c 10,000 -
Furniture and fittings A/c 13,600 -
Discount Paid A/c 5,080 -
General expenses A/c 7,820 -
Audit Fees A/c 1,400 -
Insurance Premium A/c 1,200 -
Travelling Expenses A/c 4,660 -
Cash A/c 20,760 -
Fixed Deposits with SBI A/c 40,000 -
Postage and Telegram A/c 1,740 -
Total 8,85,460 8,85,460
Adjustments:
i. Closing Stock as on 31st March 2020 is ₹ 1, 57,200.
ii. Included amongst the debtors is ₹ 6,000 that is due from Mr. Ghan shyam and
included amongst the creditors is ₹ 2,000 that is due to him.
iii. Printing and advertisements expenses are to be written off fully as per para 56 of AS
26.
iv. Provide for discount on debtors @ 2% and maintain a provision for doubtful debts @
5%.
v. Depreciate furniture and fittings @ 10%. No depreciation is charged on furniture
disposed of during the year and depreciation has to be charged on the addition during
the year.
vi. Wages and salaries are outstanding for ₹ 600 and ₹ 1,000 respectively.
vii. Insurance was paid in advance up to 30th June 2020.
viii. Furniture which stood in the books at ₹ 1,200 on 1.4.2019 was disposed of at ₹
580 on 30.9.2019 in part exchange for a new furniture costing ₹ 1,040. The net
amount payable for ₹ 460 was passed through the Purchases book my mistake.
ix. Two dishonoured cheques for ₹400 and ₹600 respectively had not been entered in the
cash book. The first for ₹400 is known to be bad. In the case of the second cheque of
₹ 600, it is expected that the debtor would be in a position to pay a dividend of 60
paise in the rupee.
x. Provide for interest receivable from fixed deposit with SBI @ 12% p.a. and provide
for interest payable on the bank loan for the whole year.

Q3. The following balances have been taken from the books of Ranchi Club for the year
ended 31st March 2020.

Particulars ₹ Particulars ₹
Furniture as at 31st March 29,400 Purchases for restaurant 7,27,300
2019
Addition to furniture on
18,900 Rent and taxes 1,22,150
1.4.2019
Billiard table and other
31,150 Wages (restaurant 1,75,000) 3,23,050
accessories as at 31.3.2019
China glass, cutlery and linen
8,750 Repairs and renewals 62,650
as at 31.3.2019
Restaurant receipts during the
12,65,600 Fuel 61,950
year
Restaurant stock on 31.3.2019 13,650 Lighting 7,700
Receipts from billiard room
89,600 Sundry expenses 46,900
during the year
Subscription received during
1,10,250 Cash in hand as at 31.3.2019 4,725
the year
Interest in deposit received
5,250 Bank balance as at 31.3.2019 32,025
during the year
Bank deposit @ 10% p.a. on
Secretary's honorarium 1,05,000 1,05,000
31.3.2019
Capital fund as at 31.3.2019 2,31,000

Additional Information:
a) The payment for purchases includes ₹ 10,500 for the year ended 31st March 2019.
b) Restaurant stocks on 31.3.2020 were ₹ 15,750
c) Included in the subscription received during the year were ₹ 16,800 for the year ended
2017-18 and ₹ 4,200 for the year 2019-20.
d) Subscriptions outstanding on 31.3.2020 were ₹ 17,500.
e) Depreciation should be provided as given below:
Particulars Rate
China glass and cutlery 20%
Billiard table and accessories 15%
Furniture 10%
f) The cost of the boarding expenses of the staff is estimated at ₹ 96,250 of which ₹
70,000 is to be charged to restaurant.
g) Cash in hand as at 31.3.2020 is ₹ 9,100.

Prepare Receipts and Payments A/c and Income and Expenditure A/c for the year ended
31st March 2020 and Balance Sheet as at that date showing the working of the restaurant
properly.

Q4. X Ltd. Has two branches i.e. at Hapur and at Rampur of Uttar Pradesh. Goods are
invoiced to branches at cost plus 50%. Goods are transferred by/to another branch at its
cost. Following information is available about the transactions of the Hapur Branch for
the year ended 31st March 2020:
Particulars ₹
Opening Stock at its cost 4,80,600
Goods sent to branch (including goods invoiced at ₹ 27,000 to 14,09,400
branch on 31st March 2020 but not received by the branch till
31st March 2020)
Goods received from Rampur branch 10,800
Goods transferred to Rampur branch 91,800
Goods returned by branch to H.O. 21,060
Goods returned by credit customer to branch 10,260
Goods returned by credit customer directly to H.O. 2,160
Agreed allowance to customers off the selling price (already
considered while invoicing) 1,800
Normal loss due to wastage and deterioration of stock at cost
to H.O. 1,800
Loss-in-transit (at invoice price) at ₹ 11,880 against which a
sum of ₹ 7,320 was received from the insurance company in
full settlement of the claim)
Cash sales ₹ 57,600 and credit sales ₹ 13,12,920
Branch expenses (including insurance charges) ₹ 90,000
Bad debts ₹ 1,800 and discount allowed to customers ₹ 900

The branch manager is entitled to a commission of 5% of profit of the branch after

charging such commission.
You are required to prepare Branch Stock A/c, Branch Adjustment A/c and Branch P&L
A/c assuming that the closing stock at the branch at its cost as per physical verification
amounted to ₹ 3, 60,000.
5. “Many important events that influence the prospects for the entity are not recorded in
the financial records” comment and give example. Also explain, why financial
statements are prepared using general accepted accounting principles?
6. “The net income of a business entity is determined by measuring the amount of
revenue generated and subtracting expenses incurred, appropriately measured. As a
consequence, the resulting difference, net profit, is a precise measure of operating
performance for the period under consideration”. Explain the statement & also explain
the basic distinction between accrual basis of accounting and cash basis of
accounting?