Set B

Unique Paper Code : 61011204

Name of the Paper : Business Accounting

Name of the Course : Bachelor of Management Studies (CBCS)

Semester : II

Duration :3 hours

Maximum Marks : 75

Instructions to Candidates:

(i)All Questions carry equal marks.

(ii) The Question paper contains 6 Questions.

(iii)Attempt any 4 Questions in all.

(iv)Use of Simple Calculator is allowed.

Q 1International Financial Reporting Standards (IFRS) are the global standard for financial
reporting and India has already prepared for a convergence by rolling out the Ind AS to
replace the Accounting Standards (AS) already in place. State any four differences and four
similarities of IndAS, AS and IFRS.

Use the information given below to prepare the common sizeBalance Sheet of Opal Ltd and
comment on the changes observed between 31.03.2020 and 31.03.2021:
PARTICULARS Amount (in Rs)
31.03.20 31.03.21
I. Equity and Liabilities:
1. Shareholders’ funds
a) Share Capital 1,00,000 1,65,000
b) Preference Share Capital 50,000 75,000
c) Reserves and Surplus
(i) Reserves 10,000 15,000
(ii) P & L A/c 7,500 10,000
2. Non-current Liabilities

3. Current Liabilities
Trade payables 20,000 25,000
Provision for Tax 10,000 12,500
Proposed dividend 7,500 12,500
Bank Overdraft 25,000 25,000
Total 2,30,000 3,40,000
II. Assets
1. Non-current Assets
(a) Fixed assets
(i)Tangible Assets
Property, Plant and Equipment 80,000 1,05,000
(ii) Intangible Assets
Patents 40,000 76,000
2. Current Assets
a) Inventories 25,000 25,000
b) Trade Receivables 60,000 92,500
c) Cash 20,000 26,500
d) Cash at Bank 5,000 15,000
Total 2,30,000 3,40,000

Q 2 Record the following transactions in General Journal of M/s 365 Days. The transactions
are not linked and are totally independent of each other. Accounting year of the concern ends
on March 31 each year.

Date Transactions
March 1, 2021 Paid insurance premium of the office car amounting to Rs. 9,000by
cheque
March 2, 2021 Repaid the bank loan from SBI amounting to Rs. 3,00,000by cheque. It
included interest on bank loan amounting to Rs. 20,000
March 5, 2021 Received Commission amounting to Rs. 5,700 in cash
March 7, 2021 Goods costing Rs. 500 were stolen from the shop. The same were not
insured.
March 15, 2021 One of our debtors, M/s R.J. & Sons, was declared insolvent and could
pay us only Rs. 10,500 out of a total due of Rs. 25,000. The payment
was received by chequebut not deposited into bank.
March 23, 2021 Owner of the business, Ms. Raksha, withdrew Rs. 5,000 from the
business bank account for payment of her daughter’s school fee
March 27, 2021 Paid Rs. 15,000 to M/s Treaty enterprises by cheque, as advance for
supply of goods in the first week of next month
March 31, 2021 Charged depreciation on office furniture amounting to Rs. 1,500

Q 3 Prepare Trading account, Profit &Loss account and Balance Sheet for M/s Madhura &
Sons for the year ending on March 31, 2021after giving effect to the adjustments:

Trial Balance as on March 31, 2021

Amount (in Rs.)

Account
Debit Credit
Capital 22,59,200
Cash in hand 2,50,000
Cash at Bank 5,00,000
Purchase and Sales 31,00,000 41,50,000
Wages 50,000
Postage and Telegram 1,05,000
Salaries 95,000
Insurance 90,000
Printing and Stationery 95,500
Stock 5,00,000
Motor car 48,000
Returns 55,000 45,000
Furniture 5,50,000
Debtors and Creditors 10,00,000 4,00,000
General Expense 65,700
Rates and Taxes 50,000
Salesman Commission 78,000
Advertisement 1,70,000
Drawings 45,000
Carriage Inward 10,000
Carriage Outward 22,000
Discount 50,000 75,000
Total 69,29,200 69,29,200

Adjustments: Closing stock is valued at Rs 1,45,000; Proprietor withdrew goods worth Rs

50,000 during the year; Depreciate Motor car @ 20%, Furniture @ 10%; Salary is paid at the
rate of Rs. 10,000 per month; Commission is to be paid @ 10% of sales; Debtors include Rs.
50,000 bad debts andcreate a provision for doubtful debts @ 5%.

Q 4 Altman Z Score Model can be used to predict the bankruptcy of any firm by giving
weightages to various ratios. Explain the model, its component ratios and discuss the
applicability of model in corporate analysis.

The following figures and ratios relate to M/s Furnishing Limited. Calculate the necessary
details to prepare the Balance Sheet of the company:

Sales for the year 45,00,000

Gross Profit Ratio 20%
Fixed Asset Turnover (based on cost of goods sold) 1.5
Stock turnover Ratio (based on cost of Goods Sold) 6
Liquid Ratio 1.5
Current ratio 2
Debtor Collection Period 2 months
Ratio of Reserves & Surplus to Share Capital 0.25
Capital gearing ratio 0.8
Fixed Asset to Net Worth 1.2

Q 5Following transactions were entered into by M/s Alpha & Co in the month of February
2021. You are required to record the same in a three-column cash book.

Date Particulars
Cash in hand Rs. 52,000
Feb 1
Bank Overdraft from IndusInd Bank Rs. 32,600
Feb 3 Cash purchases goods for Rs. 22,000 from M/s Jai Kishan & Sons
Owner of the business, Mr. Joseph, invested Rs. 1,50,000 into the business as
Feb 5
cash
Rs. 1,00,000 of the business cash was deposited in the business bank account
Feb 7
with IndusInd Bank
Feb 8 Purchased furniture for business use. Paid Rs. 8,200 by cheque.
Feb 8 Cash sales Rs. 25,900
Feb 10 Issued a cheque to pay rental of the shop amounting to Rs. 10,500
Feb 13 Paid commission Rs. 3,100 cash
One of our customers, Mr. Harsh, was declared insolvent. A cheque amounting
Feb 14 to Rs. 5,600 only, out of a total due of Rs. 7,000 was received from him. The
cheque was deposited into the bank on the same day.
Feb 20 Sold goods worth Rs. 3,300 for Rs. 3,900 cash
Feb 21 Deposited business cash Rs. 25,000 into bank
Goods worth Rs. 6,600 were destroyed in transit. The transport company paid Rs.
Feb 22
6,000 cash in full settlement of our claim
Owner of the business, Mr. Joseph, paid Rs. 3,800 from business bank account
Feb 24
for his personal hotel stay
 Received a cheque amounting to Rs. 8,200 from M/s R.K. & Sons in full
Feb 26
settlement of our claim of Rs. 8,300.
Feb 27 Deposited cheque received from M/s R.K. & Sons into bank
The cheque given by M/s R.K. & Sons was returned by the bank as dishonoured
Feb 28 due to insufficient funds. Bank charged Rs. 200 as bank charges for the
dishonoured cheque

Q 6 From the following information prepare Cash Flow Statementfor the year ending on 31-
03-2020:
Nirbhay Ltd
Balance Sheet
Particulars Amount (in Rs.)
31-03-2021 31-03-2020
LIABILITIES
Long-term Liabilities
Equity Share Capital 20,00,000 16,00,000
General Reserve 4,80,000 4,00,000
Profit & Loss A/c 2,44,800 2,44,000
Bank Loan -- 5,60,000

Current Liabilities
Trade Payables 10,81,600 12,00,000
Provision for Tax 2,80,000 2,40,000
TOTAL LIABILITIES 40,86,400 42,44,000

ASSETS
Non-current Assets
Land and Building 15,20,000 16,00,000
Machinery 13,52,000 12,00,000
Furniture 40,000 --

Current Assets
Inventories 5,92,000 8,00,000
Trade receivables 5,13,600 6,40,000
Cash at bank 64,000 --
Cash 4,800 4,000
TOTAL ASSETS 40,86,400 42,44,000
Additional information includes: Dividend of Rs 1,84,000 was paid during the year;
Machinery worth Rs 2,00,000 was purchased in lieu of issue of equity shares and worth Rs
64,000 in cash. Depreciation on machinery was Rs 96,000; Income tax paid during the year
was Rs 2,24,000; Loss on sale of machinery Rs 1,600 was written off against general reserve.