JAYARAJ ANNAPACKIAM COLLEGE FOR WOMEN (AUTONOMOUS)

I B.Com (CA). II.Sem – End-SemFINANCIAL ACCOUNTING – II CA2A2

HOURS: 2 (9-11A.M)DATE : - 03-2010 MARKS:50

PART-A (5X1=5)Answer ALL questions:

1. Branch trading and profit and loss account is only a (a) memorandum account (b) personal account (c) real account

2. Under straight line method depreciation is charged evenly (a) every year (b) half-year (c) quarterly throughout the life of the asset.

3. Single entry system is kept by (a) sole trader (b) Govt companies (c) Private companies

4. Under the net worth method any additions to capital during the accounting period must be (a) added to profit (b) added to capital (c) deducted from capital

5. Depreciation charged on (a) fixed assets (b) Current assets (c) floating assets

PART-B (5X1=5)Answer ALL questions:

6. What is Single Entry system?7. What is statement of affairs?

8 Explain the demerits of Single entry system 9. What the special features of branch accounts?

10. What are the different types of depreciation?

PART-C (4X10=40)

Answer any four questions:

11. Ram Prakash keeps his books by the Single Entry method. His position on 31st December 2003 was as follows:

Cash in hand Rs.200; Cash at bank Rs.3000; Stock Rs.20,000; Sundry Debtors Rs. 8,500; Fixtures and fittings Rs.1,800; Plant and machinery Rs. 15,000; Sundry Creditors Rs.22,000; During the year Ram Prakash introduced Rs.5000 as further capital in the business and withdrew Rs.750 per month.

On 31st December 2004, his position was as follows:Cash in hand Rs.300; Cash at bank Rs.2000; Stock Rs.19,000; Sundry Debtors Rs.14,000; Fixtures and fittings Rs.1,500; Plant and machinery Rs.27,000; Sundry Creditors Rs.29,000.

From the above prepare a statement showing the Profit or Loss made by him for the year ended 31st

December 2004

12. A Delhi merchant has a Branch at Madras to which he charges the goods at cost plus 25%. The Madras Branch keeps its own Sales ledger and remits all cash received to the Head Office every day. All expenses are paid from the Head Office. The transactions for the branch during the year 2002 were as follows.

Rs. Rs.Stock (1-1-2002) at I.P

11,000 Returns Inwards 500

Debtors (1-1-2002)

100 Cheques sent to Branch

Petty cash (1-1-2002)

100 Rent 600

Cash sales 2,650

Wages 200

Credit sales 23,950 Salary and other expenses 900Goods sent to branch at I.P

20,000 Stock (31-12-2002) at I.P 13,000

Collection on ledger accounts

21,000 Debtors (31-12-2002) 2,000

Goods returned to H.O. at I.P

300 Petty cash(31-12-2002)including miscellaneous income Rs.25 not remitted

125

Bad debts 300Allowances to Customers

250

Prepare the branch trading and profit and loss account and branch account for the year ending 31-12-2002.

13. The Southern Confectionery Company, Mumbai has a branch at Chennai. Goods are invoiced to the Chennai Branch at selling prices, being cost plus 25 percent. The Chennai Branch keeps its own Sales Ledger and transmits all cash received to the Head Office daily. All expenses ar paid from Mumbai.

Rs.

Stock 1.1.1988 12,500

Stock 31.12.1988 15,000

Debtors 1.1.1988 7,000

Debtors 31.12.1988 9,000

Rent and Rates (paid by H.O.) 4,000

Sundry Expenses (paid by H.O) 800

Cash sales for the year 54,000

Credit sales for the year 35,000

Cash received from Debtors 33,000

Goods invoiced from Mumbai 91,000

Wages paid from H.O. 3,400

14. A firm acquires a four - year lease on 1st January 2002

for Rs. 40,000. The firm decides to establish a Depreciation

Fund for its replacement. Interest is expected to be earned at

5%.

On 31st December 2005, the balance at Bank,

before the receipt of interest on Depreciation Fund

Investment, was Rs. 26,000. Investments were sold for

Rs. 29,000. New lease was acquired for Rs. 45,000.

Give journal entries and ledger accounts relating

to the above.

Note: The Sinking Fund tables show that Re. 0.232012

has to be invested every year to produce Re. 1 at the end

of four years.

15. A company whose accounting year is the calendar year, purchased on 1st April 2003, machinery costing Rs.30,000. It purchased another machine on 1st October 2003, costing Rs. 20,000 and on 1st

July 2004, costing Rs. 10,000. On 1st Jan 2005, one-third of the machinery which

was installed on 1st April 2003 became obsolete and was sold for Rs. 3,000.

Show how the Machinery Account would appear in the books of the Company. The machinery was depreciated by the Fixed Instalment method @ 10% p.a.