No.

of Printed Pages : 8 ECO-14

BACHELOR'S DEGREE PROGRAMME

Term-End Examination
December, 2012

ELECTIVE COURSE : COMMERCE

ECO-14 : ACCOUNTANCY-II

Time : 2 hours Maximum Marks : 50

Weightage : 70%

Note : Attempt any four questions including question no. 1

which is compulsory.

1. Attempt any two of the following questions : 7,7

(a) How are branch balances incorporated in
head office books at the end of the
accounting year ?
(b) What do you mean by Departmental
Accounts ? Why are they considered
necessary ?
(c) Explain the provisions relating to issue of
shares at a discount under Section 79 of the
companies Act.
(d) What is 'Purchase Consideration' ? Explain
the various methods of calculating purchase
consideration.

ECO-14 1 P.T.O.
2. From the following information, calculate : 12
(a) Current Ratio
(b) Quick Ratio
(c) Debt Equity Ratio
(d) Proprietary Ratio

Amount Amount
Liabilities Assets
(Rs). (Rs).
Equity Capital 10,00,000 Fixed Assets 17,00,000
7% Pref.
3,00,000 Stock 4,00,000
Capital
Reserves 1,50,000 Debtors 3,00,000
6% Debentures 8,00,000 Bank 1,50,000
Overdraft 50,000 Cash 50,000
Creditors 3,00,000
26,00,000 26,00,000

3. A, B and C were partners sharing profits in the 12

ratio of 2 : 2 : 1 respectively. Their Balance Sheet
as on December 31, 2010 is as follows :

Amount Amount
Liabilities Assets
Rs. Rs.
Creditors 20,000 Cash 5,000
Reserve Fund 12,000 Debtors 22,000
A's Capital 40,000 Stock 15,000
B's Capital 20,000 Furniture 6,000
C's Capital 5,000 Machinery 40,000
Goodwill 9,000
97,000 97,000

ECO-14 2
 They decided to dissolve the firm. The assets
realized as under :
Debtors Rs.16,000; Stock Rs.10,000;
Furniture Rs.2,000; Machinery Rs.18,000
Goodwill Nill
Creditors were paid off at a discount of 2%. B
was entrusted with the task of realizing assets and
paying of liabilities for which he was to be paid a
sum of Rs. 1,600. There was an unrecorded asset
in the books which was taken over by B at an
agreed price of Rs. 3,400. Repairs to machinery
Rs. 800 were still outstanding and were not
recorded in the books.
Draw up the necessary ledger accounts to close
the books of the firm.

4. A Ltd. was incorporated with an authorized 12

capital of Rs. 5 Lakh divided into shares of Rs. 10
each. The company offered for public subscription
20,000 shares at a premium of Rs. 2 per share,
payable Rs. 2 on application; Rs. 5 on allotment
including premium and the balance in two calls
of Rs. 2.50 each. Applications for 30,000 shares
were received by the company. The directors
made the allotment as follows :
No allotment was made to the applicants of 6,000
shares and the application money was refunded.
Allotment was made to the remaining applicants
on pro-rata basis and money paid in excess on
application being adjusted to ward allotment. All

ECO-14 3 P.T.O.
 the allotees except Rahim to whom 500 shares
were allotted paid the amount of both the calls
on the due dates. As a result of his failure to pay
the call money his shares were forfeited 300 of
the forfeited shares were reissued as fully paid
after the second call at Rs. 11 per share. Give
journal entries to record the above transactions.

5. (a) Explain with example, as to how is goodwill 7, 5

treated when the incoming partner does not
bring his share of goodwill in cash.
(b) Journalise the following transactions :
(i) 1500 7% debentures of Rs. 200 each
issued at a discount of Rs. 20 per
debenture redeemable at par.
(ii) 2000 8% debentures of Rs. 250 each
issued at par, redeemable at a
premium of 10%.

6. State the journal entries passed to open various 6, 6

accounts under Stock and Debtors System as
applicable to hire purchase business. Also
distinguish between Stock and Debtors System
and Hire Purchase Trading A/C method of
ascertaining profit or loss in hire purchase
transactions.

ECO-14 4
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ECO-14 5 P.T.O.
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97,000 97,000

ECO-14 6
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ECO-14 7 P.T.O.
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ECO-14 8