They did not, however, want to alter the book values of the assets and reserves but record the change by passing one single Journal entry.
The profit and Loss Account of the firm for the year ended 31st March, 2008 shows a net profit of `22,900.
a) to show the Journal entry adjusting the partners’ capital as on 1st April, 2007,
b) to prepare the Profit and Loss Appropriation Account for the year ended 31st March, 2008, after taking into consideration the following adjustments:
i) Interest on Capital at 5% p.a.
ii) Interest on Shastri’s Loan, and
iii) Transfer 25% of the divisible profit to the Reserve Fund after charging such Reserve.
7. What are Accounting Standards? Discuss the main objectives of such standards. (10)
8. Define short workings and explain how short working Account is maintained in the books of the lessee. (10)
B.Com (Hons) II (Second) Semester Examination 2012-13
Course Code:BCH204 Paper ID: 0522413
Advanced Accounting
Time: 3 Hours Max. Marks: 70 Max Marks: 75
Note: Attempt six questions in all. Q. No. 1 is compulsory.
1. Answer any five of the following (limit your answer to 50 words). (4x5=20)
a) Briefly enumerate the guidelines issued by the Institute of Chartered Accountants of India on valuation of inventories in AS-2.
b) How will you deal with the following in the Income and Expenditure Account and Balance Sheet of a Club as on 31st March, 2008.
`
Subscription received during 2007-08 25,000
Subscription Outstanding on 01-04-2007 5,000
Subscription Outstanding on 31-03-2008 10,000
Subscription received in advance as on 01-04-2007 7,500
Subscription received in advance as on 31-03-2008 5,000
c) What is royalty?
d) How will you convert Income and Expenditure Account into Receipts and Payment Account?
e) Distinguish between admission and retirement of a partner.
f) What is Del Credere Commission? Why is such commission paid?
g) Distinguish between Hire Sale and Credit Sale.
h) Give any three objectives of branch accounting.
2. Delhi Ltd. purchased from Mumbai Co. three machines costing `40,000 each of the Hire-Purchase System. Payment was to be made `30,000 down and the remainder in three equal installments together with interest at 5%. Delhi Ltd. writes off depreciation @20% on the diminishing balance. It paid the installment due at the end if the first year but could not pay the next.
Give the necessary ledger Accounts in the books of both the parties for two years if the hire vendor took possession of all the tree machines. The hire vendor spent `5,800 on getting the machines thoroughly overhauled and sold them for `70,000. (10)
3. The following is the Receipts and Payments Account of the Delhi Literary Society for the year ended 31st March, 2008:.
Particulars / ` / Particulars / `To Cash at Bank / 12,500 / By Salaries / 2,500
To Subscriptions / 52,500 / By Printing and Stationery / 1,250
To Annual Day Receipts / 26,800 / By Annual Day Expenses / 1,500
To Mushaira Receipts / 22,500 / By Mushaira Expenses / 10,000
To Dividend on Shares / 2,500 / By Telephone Charges / 2,500
By Sundry Expenses / 2,000
By Shares Purchased / 75,000
By Postage & Telegrams / 2,200
By Building Maintenance / 6,340
By Cash at Bank / 13,510
1,16,800 / 1,16,800
The following further information is furnished:
a) The value of the Building owned by the Society stood at `50,000 as a 1st April, 2007. Depreciation at 5 percent has to be proved.
b) There were 200 members paying subscriptions at the rate of `250 per annum each.
c) As on 1st April, 2007 no subscriptions had been received in advance but subscriptions were outstanding to the extent of `1,000 as at 31st March, 2007 and on 31st March, 2008 subscriptions outstanding were `1,500.
d) Postage stamps worth `250 were with the secretary at the beginning of the year and the stamps at the end of the value of `150.
e) The investments in shares at he beginning of the year was to the extent of `5,000.
f) An amount of `250 in respect of the Annual Day Receipts was yet to be received.
g) The rent of the theatre (amounting `2,500) where the Mushaira (poetic symposium) was held is still to be paid.
h) Hire of telephone to the extent of `300 is paid in advance.
You are required to prepare the Income and Expenditure Account for the year ended 31st March, 2008 and the Balance Sheet as at that date. (10)
4. Distinguish between Brach Account and Departmental Accounts. (10)
5. Distinguish joint venture from consignment and partnership. (10)
6. Raju Shastri and Tanka are partners in a firm, sharing profits and losses in the ratio of 5:3:2. Their Balance Sheet as on 31st March, 2007 stood as follows: (10)
Liabilities / ` / Assets / `Sundry Creditors / 25,000 / Cash at Bank / 10,000
General Reserve / 20,000 / `
Shastri’s Loan Account / 15,000 / Sundry Debtors 22,000
Capital Accounts: ` / Less: Provision for
Raju 25,000 / Bad Debts 2,000 / 20,000
Shastri 10,000 / Building / 10,000
Tanka 5,000 / 40,000 / Machinery / 35,000
Furnitures / 25,000
1,00,000 / 1,00,000
From 1st April, 2007, the partners decided to change their profit sharing ratio as 2:1:2 instead of their former ratio of 5:3:2 and that purpose the following adjustments were agree upon:
i) The provision for bad Debts was to be raised to 10%
ii) Furniture was to be appreciated by `5,200.