LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Sc. DEGREE EXAMINATION – COMPUTER SCIENCE
SUPPLEMENTARY EXAMINATION – JUNE 2007
CO 4203 - ACCOUNTS AND BUSINESS APPLICATIONS
Date & Time: 26/06/2007 / 9:00 - 12:00
Answer
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Dept. No.
Max. : 100 Marks
SECTION – A
ALL the questions:
(10 x 2 = 20 marks)
What is meant by compensating errors?
Distinguish between straight line method and written down value method of depreciation.
Explain double entry system.
What do you mean by the term “contra entry”?
Give the meaning of bank reconciliation statement.
Prepare trial balance from the following:
Capital –9,000
Plant & Machinery—12,000
Purchases—8,000
Sales—12,000
Sundry creditors—8,000
Bank loan—22,000
Good will—14,000 Sales returns—4,000
Debtors—12,000
Interest received —1000
Opening stock—2,000
From the following find out which are real ,nominal or personal Accounts:
(a) Cartage paid (b) Interest received (c) Furniture (d) Naresh A/c (proprietor)
M/s Brown & Black Co bought a machinery for Rs. 1,00,000 . The estimated life of this machinery is 15
years and its estimated scrap value is Rs. 3,000. Determine the rate of depreciation.
Journalise the following:
a) On Feb 5, 2005 Ashish, who owes us Rs. 10,000 is declared an insolvent
and 60 paise in a rupee is received
b) On Feb 8, 2005 Received rent by cheque Rs. 3,000
Calculate Gross profit ratio from the following:
Opening stock=Rs.20,000 Closing stock=Rs.30,000 Sales=Rs.1,00,000
Purchases=Rs.25,000
Sales returns=Rs.2,000
Wages=Rs.5,000
SECTION – B
Answer any FIVE Questions:
(5 x 8 = 40 marks)
11. a) Distinguish between cash discount and trade discount
b) Explain double entry system.
c) What is meant by going concern concept?
d) Define “Accounting”.
12. Mr. James’s cash book shows a overdraft balance of Rs. 16,500 on 31st March 2005 and on investigation
it was found that:
a) Cheque issued to Lavanya but not yet presented for payment Rs. 4,000
b) Insurance premium paid by the bank directly as per standing instruction of the customer but not
entered in cash book Rs.750
c) Bank interest credited in the passbook but not recorded in cash book Rs.250
d) Dividend amounting to Rs. 2,750 received by the bank and entered in the pass book but no entry
is made in the cash book.
e) Cheque amounting to Rs. 15,000 issued to Mr. Xavier is dishonoured, but not recorded in cash
book
f) On March 20th Aravind, customer of Mr. James deposited the cheque amounting to Rs.1,300
directly into bank.
g) Cheque of Rs. 12,000 deposited on 27th March had not been credited by the bank.
h) Rent received Rs. 4,000 but not recorded in the cash book
13. Action Co. Ltd purchased a machinery on 1st January 2002 for Rs. 1,50,000. On 1st July 2004, the
machinery was sold for Rs. 1,20,000 and on the same date another machinery was purchased for Rs.
2,00,000. Depreciation has to be charged at 10% on the original cost. Assuming that the accounts are
closed every year on 31st December, you are required to prepare Machinery A/c and Depreciation A/c.
14. Journalise the following transactions in the books of Mr. Sunil
November
2005 2 Sunil started business by investing cash Rs. 1,00,000, and machinery 2,00,000
Opened a current account in Indian bank Rs.20,000
7 Sold goods to Mr. Anil kumar Rs. 10,000
8 Purchased furniture for cash Rs. 15,000
11 Anil kumar settled his account
16 Bought goods from Mr. Chandran for cash Rs. 22,000
19 Returned goods to Mr. Chandran Rs. 2,000
24 Paid wages by cheque Rs. 3,000 & paid salaries by cash Rs. 8,000
29
15. Prepare a petty cash book under imprest system with various analytical columns and the imprest amount
being Rs.3000.
April 2003
Rs.
1 Cash in hand with the petty cashier
600
1 Cash received from the chief cashier to make up the imprest 2,400
3 Bought postage stamps
150
5 Paid taxi fare
300
6 Purchased pencils & pads
115
7 Paid for courier service
45
10 Paid for office cleaning
70
12 Paid to sales man for his conveyance
145
15 Refreshment for workers
280
16 Paid for office expenses
470
19 Repair of typewriting machine
125
20 Paid tips to peon
10
22 Paid Mr. Ganesh against his account
1,000
25 Auto fare paid
35
30 Paid for speed post
24
16. Rectify the following errors Without suspense account:
(a) Purchases book is over cast by Rs. 400
(b) Sold goods for cash Rs. 20,000 and omitted to make an entry in cash book
(c) Rs. 10,000 paid for Machinery purchased, has been wrongly entered in
Purchase book
(d) Received interest for Rs. 200 but it was wrongly posted as Rs.100 for cash
(e) Purchased goods from Ram&Co for Rs. 2,400 has been wrongly entered in
Ramesh & Co.
(f) Sales book is under cast by Rs. 390
(g) Paid salaries Rs. 3,500 but wrongly debited to Wages a/c
(h) Sale of goods to Kamal for cash amounting to Rs. 1,700 has been wrongly
debited to Kamal’s A/c.
17. Prepare proper subsidiary books of M/s star departmental stores:
November
2005 2 Bought from Shanmugam Rice mart:
10 bags of rice @ Rs. 1,300 per bag
30 bags of sugar @ Rs. 2,300 per bag
6 Sold to Vinod 2 bags of rice @ Rs. 1,500 per bag
11 Bought from Bismi book centre:
10 gross long size note book @ Rs. 25 each less trade discount 10%
18. From
20 gross short size note book @ Rs.108 per dozen less trade
the
discount 10%
17 Returned to Shanmugam Rice mart 2 bags of rice and 5 bags of sugar
19 Sold to Dinesh 2 gross note books @ Rs. 28 each for cash
22 Credit note sent to Vinod for Rs. 550
25 Sold to Ramlal traders:
5 bags of rice @ Rs. 1,600 per bag less trade discount 5%
10 dozen notebooks @ Rs. 12 each less trade discount 5%
27 Sold old unused furniture to M/s Krishnan & Co on credit for Rs. 6,500
following data you are required to calculate the cash from operations:
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Fund from operations for the year 2005 Rs.84,000. Current assets and
liabilities as on 1.1.2005 and 31.12.2005 were as follows:
Particulars
Trade creditors
Trade debtors
Bills receivable
Bills payable
Inventories
Trade investments
Outstanding expenses
Prepaid expenses
1.1.2005
Rs.
1,82,000
2,75,000
40,000
27,000
1,85,000
40,000
20,000
5,000
31.12.2005
Rs.
1,94,000
3,15,000
35,000
31,000
1,70,000
70,000
25,000
8,000
SECTION – C
Answer any TWO questions:
(2 x 20 = 40 marks)
19. From the following trial balance of Mr. Raman Prepare Trading Profit & Loss A/c and Balance sheet for
the year ended 31-12-2006
Particulars
Sundry debtors
Plant & machinery
Interest
Rent , rates & taxes
Freight
Wages
Sales returns
Purchases
Opening stock
Drawings
Direct expenses
Salaries
Advertising
Discount allowed
Bad debts
Furniture & fittings
Cash in hand
Bills receivable
Capital
Purchase returns
Sales
Sundry Creditors
Bank overdraft
Bills payable
Debit
Rs.
92,000
20,000
430
5,600
1,320
7,000
5,400
1,50,000
60,000
22,000
1,350
11,200
840
600
800
10,000
2,060
12,000
4,02,600
Credit
Rs.
70,000
2,600
2,50,000
60,000
8,000
12,000
4,02,600
Adjustments:
(i)
Stock on hand on 31-12-2006 Rs.90,000
(ii)
Provide depreciation on plant & Machinery at 5% .
(iii)
Outstanding rent was Rs.500 and Outstanding wages Rs.400
(iv)
Write off Rs. 800 as further bad debts
(v)
Prepaid salaries Rs.700
20. From the following transactions, prepare Triple column cash book of Mr. Arvind for the month of August
2005:
3
August
2005 1
3
6
7
9
12
14
15
19
20
21
23
24
27
28
29
30
31
Cash balance Rs. 20,000
Bank balance Rs. 23,000
Paid rent by cheque Rs. 5,000 and salaries by cash Rs.12,000
Sold goods for cash Rs.27,000
Bought goods from M/s Krishna & Co on credit Rs.20,000
Cash paid into bank Rs.5,000
Bought goods for cash Rs. 8,000
Settled M/s Krishna & Co in full by issuing cheque for Rs.19,900
Sold old Computer to Mr. Prashanth for Rs.15,000
Cheque issued to M/s Krishna & Co is dishonoured
Paid cash to M/s Krishna & Co Rs.20,000
Withdrew cash from bank for office use Rs. 4,500
Prashanth settled his account by giving a cheque for Rs.14,850
and the cheque was banked immediately
Purchased Furniture from M/s Woodpecker for cash Rs.13,500
Prashanth’s cheque was dishonoured
Received dividend by cheque Rs.2,300 and deposited immediately into bank
Prashanth settled his dues by cash Rs. 15,000
Sold goods to Mr. Ramesh Rs.30,000
Final settlement by Ramesh Rs.29,900
21. From the following Balance Sheet of Sona Ltd as on 31-12-2006, Calculate:
(a) Current ratio
(b) Quick ratio
(c) Fixed asset turnover ratio
(d) Debtors collection period (e) Creditors turnover ratio (f) Stock turnover ratio
(g) Finance expenses ratio (h) Gross profit ratio
(i) Absolute liquidity ratio
Liabilities
Equity share capital
6% Preference share capital
General reserve
Profit & Loss A/c
Bills payable
12% debentures
Creditors
Outstanding expenses
Bank overdraft
Rs.
10,00,000
5,00,000
1,00,000
4,00,000
1,24,000
5,00,000
1,20,000
76,000
80,000
Assets
Plant & Machinery
Land & Buildings
Furniture
Closing Stock
Bills receivable
Cash at bank
Sundry debtors
Prepaid expenses
29,00,000
Gross profit = 2,50,000
Opening stock = 1,00,000
Interest on loan=5,000
Rs.
9,00,000
8,00,000
2,00,000
6,00,000
30,000
2,00,000
1,50,000
20,000
29,00,000
Sales = 6,00,000
Purchases = 2,00,000
Cash purchases=50,000
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