FIRST SEMESTER B.COM DEGREE EXAMINATION
FINANCIAL ACCOUNTING
November – 2012
Section A
1. Answer any ten of the following:
a) State any two merits of amalgamation of firms.
b) What do you mean by dissolution of partnership firms
c) What is piecemeal distribution of cash
d) What is deficiency account
e) State any two objects of conversion of partnership into a limited company
f) State any two difference between statement of affairs and Balance sheet
g) Why you are preparing total creditors account?
h) Who is a Co-venture?
i) What is memorandum of joint venture account
j) What is minimum rent
k) What recoupment of short working
l) State any two features of joint venture
Section B
Attempt any three of the following
2. Explain the different between joint venture and partnership (any five)
3. Find out the total purchase from the following:
Opening balance of bills payable
5000
Opening balance of creditors
6000
Closing balance of bills payable
7000
Closing balance of creditors
4000
Cash paid to creditors
30200
Bills payable met during the year
8900
Returns outward
1200
Cash purchased
25800
Discount received
300
4. AB company limited agreed to take over the assets of A and B partnership firms as under:
Land and building
1,20,000
Goodwill
40,000
Debtors
50,000
Stock
40,000
Machinery
30,000
The company also agreed to take overs creditors and bills payable at their book values
which were Rs.40,000 and Rs.20,000 respectively. The purchase consideration was
settled by the issue of Rs.20,000 equity shares of Rs.10/- each and balance in cash
Calculate purchase consideration
5. Anand and Basant who share profits and losses in the ratio of 3:2 agreed to dissolve their
firm on 31-3-2011. On that date their Balance Sheet was as under
Liabilities
Creditors
Basant’s loan
Reserve Fund
Capitals:
Anand
Basant
Rs.
6,000
4,000
10,000
20,000
20,000
Assets
Cash at bank
Debtors
Less: provision
Stock
Furniture
40,000 Machinery
Goodwill
60,000
Rs.
1,000
8,000
400
7,600
24,400
2,000
22,000
3,000
60,000
The assets realized as: Machinery Rs.30,000; Furniture Rs.3,000; Stock Rs.24,000;
Debtors Rs.7,000; Creditors were paid off a discount of 10%. The expenses of realization
amounted to Rs. 600 also paid.
Prepare Realisation account
6. Dharwad Co. Ltd took a 20 year lease of coalmine from Mr.Vasant on royalty of Rs.2 Per
tonne with a minimum rent of Rs.20,000 per annum. Each year’s excess of minimum rent
over royalties is recoverable out of royalties of the next two years only. The output of the
first five years was as follows:
I year
4,000 tonnes
II year
7,000 tonnes
III year
8,000 tonnes
IV year
12,000 tonnes
V year
19,000 tonnes
Prepare Royalty chart.
7. The following are the balance sheets of M/s A and B M/s C and D as on 31-3-2011 on
which date they decided to amalgamate their business :
Liabilities
Capitals
A
B
C
D
Reserve
Creditors
A&B
Rs.
20,000
10,000
6,000
14,000
50,000
C&D
Rs.
15,000
15,000
8,000
38,000
Assets
Machinery
Furniture
Investment
Stock
Debtors
Cash in hand
A&B C&D
Rs.
Rs.
9,000 10,000
12,000
3,000
4,000
8,000 15,000
16,000
7,000
1,000
3,000
50,000
38,000
A and B were sharing profits and losses in the ratio of 3:2 and C and D equally. The
terms of amalgamation were as follows:
a) The new firm was to take over all the assets and liabilities of both the firms
b) The assets of A and B were valued as under: Machinery Rs.10,000; Stock Rs.6,000;
debtors Rs.15,000; furniture and investment at their book values and Goodwill Rs.
5,000
c) The assets of C and D were valued as under: Machinery Rs.12,000; Furniture
Rs.4,500; Stock Rs.14,000; Debtors Rs.6,500 and Goodwill Rs.6,000
d) The new profit sharing ration of A, B, C and D will be 3:3:2:2
Prepare Revaluation accounts in the books of both firms
Section C
8. Anand, Binod and Chalia were partners in a firm who share profits and losses in the
ration of 5:3:2. Their Balances Sheet as on 31-12-2010 stood as follows :
Liabilities
Capitals
Anand
Binod
Creditors
Bills Payable
Rs. Assets
Cash
10,000 Debtors
5,000 Machinery
45,000 Buildings
15,000 Stock
Chaila’s capital
75,000
Rs.
1,500
12,500
17,500
20,000
15,000
8,500
75,000
The assets realized as follows:
i)
Stock realized 50% of the book value
ii)
Debtors realized 20% less than the book value
iii)
Machinery realized Rs.9,000
iv)
Building realized Rs. 18,500
Unfortunately, all partners became insolvent. The following amounts were received from the
surplus of their private assets.
Anand Rs.3,000; Binod Rs.500 and Chalia; Nil
Show the necessary ledger accounts to close the books of the firm.
9. Mr. Somnath, a trader has not maintained proper books of accounts. He supplied you the
following information from his records and he requests you to prepare trading and profit and
loss account for the year ended 31-12-2010 and balance sheet as on that date.
Receipts:
Cash received from the sale of landed property and
Deposited in firm’s bank account
Cash Sales
Amount collected from debtors
Private dividend paid into Firm’s Bank A/c
Dividend received on investments
Amount received from LIC on the life policy of his wife used in business
Rs.
37,500
3,000
55,000
500
1,250
2,000
Payments
Payments to creditors
Private payments (drawing)
Payments to his son for education
Cash paid to his son in law for radio
Wages paid
Rent paid
General expenses paid
Purchased of National Saving Certificate
Rs.
70,500
7,750
1,200
800
6,000
500
1,400
4,000
The assets and liabilities of the firm at the beginning and at the end of the year were as
follows:
1-1-2010
31-12-2010
Bank balance
2,000
8,500
Cash in hand
75
675
Stock
5,000
30,000
Trade creditors
6,825
7,500
Trade debtors
3,500
5,000
Investments
12,500
12,500
National Saving Certificates
4,000
10. Karnatak Colliery Co. Ltd. Leased from Vasu, a landlord, a mine on a royalty of 50 paise
per tonne of coal raised with a minimum rent of Rs.10,000 P.A. Each year’s excess of
minimum rent over royalties is recoverable out of royalties of the next three years. In the
event of strike and minimum rent if not reached, the lease provided that the actual
royalties earned for the year discharged the rental obligations for that year. The results of
the working were as under:
For the year end 2005
For the year end 2006
For the year end 2007 (strike)
For the year end 2008
For the year end 2009
15,000 output in tonnes
21,000 output in tonnes
12,000 output in tonnes
16,000 output in tonnes
22,000 output in tonnes
Write up Royalties A/c, Short working a/c and Landlords A/c in the books of Karnatak
colliery Co. Ltd.,
11. Ashok and Santosh entered into a joint venture agreeing to divide the profits or losses in
the ratio of 2:1. Ashok contributed Rs.10,000 and Santosh contributed Rs.5,000 and
deposited the same in a joint bank account. They purchased good worth Rs. 20,000 from
savant paying Rs.12500 and accepting a bill drawn by him for the balance. They paid for
carriage Rs.1250, godown rent Rs.250 and sales expenses Rs.500. All the goods were
sold for Rs.28,000. They also met their bills payable on the due date.
Prepare joint venture a/c; joint bank a/c; Ashok A/c and Santosh A/c, assuming that final
settlement was made between them.
12. X, Y and Z were partners sharing profits
their Balance Sheet as on 31-12-2010
Liabilities
Rs.
Creditors
18,000
Bills payable
12,000
Capitals:
X
30,000
Y
36,000
Z
12,000
1,08,000
and losses in the ratio 3:2:1. The following is
Assets
Machinery
Debtors
Stock
Building
Cash
Rs.
20,000
26,000
16,000
40,000
6,000
1,08,000
On the above they decided to dissolve the firm. The assets were realized in installments as
January 18,000 ;
February 24,000;
March 36,000;
Prepare a statement showing the distribution of cash among the partners as and when the assets
were realized.
Case study (compulsory)
13. Ram Sham Co. Ltd. Was formed to take over the running business of M/s/ Ram and Sham
who shared profits and losses in the ratio of 3:2 respectively. The balance sheet of the firm
was as under:
Liabilities
Rs. Assets
Rs.
Creditors
20,000 Land & Building
42,000
Bills payable
10,000 Machinery
20,000
Mrs. Ram’s loan
4,000 Stock
22,000
Capitals:
Debtors
28,000
Ram
60,000 Investments
5,000
Sham
40,000 Goodwill
15,000
Bank
2,000
1,34,000
1,34,000
The company agreed to take over the assets as under:
Machinery
15,000
Land & Building
60,000
Stock
20,000
Debtors
25,000
Goodwill
20,000
The company also agreed to take over creditors and bills payable at book values. The
firm retained investments and sold it for Rs.6,000 and paid Mrs. Ram’s loan. The
purchase consideration was settled by the issue of 10,000 equity shares of Rs.10/- each
and the balance in cash.
Advise the partners whether the object of conversion into a limited company is fulfilled
indicating the detailed procedure to be followed for such conversion by opening
necessary ledger accounts.
*****
FIRST SEMESTER B.COM DEGREE EXAMINATION
FINANCIAL ACCOUNTING
November – 2011
1.
a)
b)
c)
d)
e)
f)
g)
h)
i)
j)
k)
l)
Section A
Answer any ten of the following:
What is meant by dissolution of partnership firm?
What is realization account
What is purchase consideration
What is the rule in Garner Vs Murray case
What do you mean by amalgamation of firms
State any two objectives of conversion of firm into a limited company
Give any two demerits of single entry system
What is statement of affairs
What is royalty
What do you mean by minimum rent
State any two difference between joint venture and partnership firm
What is Memorandum joint venture account?
Section B
Answer any three of the following
2. Find out the sundry assets from the following information;
Black, white and Yellow were partners in a firm which was dissolved. On the date of
dissolution the capitals of the partners were Black Rs.10000 (Cr); White Rs.15000 (Cr)
and Yellow Rs. 5000 (Dr). There were creditors of Rs.7500; Bank overdraft Rs.2500;
Bills payable Rs.2000 and Reserve Fund Rs.1,500.
3. Ascertain credit sales from the following
Debtors as on 1-4-2010
Debtors as on 31-3-2011
Bills receivable as on 1-4-2010
Bills receivable as on 31-3-2011
Cash received from Debtors
Cash received against Bills receivable
Bad debts
Discount allowed
Sales Returns
40,000
60,000
20,000
24,000
1,00,000
30,000
1,000
1,000
4,000
4. Ganesh ltd, has taken on lease of a mine on royalty of Rs.25 paise per tonne of iron ore
raised with minimum rent of Rs.10,000 p.a. with power to recoup the short working
during next two years of the occurrence. The output was as under:
1 year 10,000 tonnes; 2 year 24,000 tonnes; 3 year 40,000 tonnes and 4 year 90,000
tonnes.
Prepare Royalty chart.
5. Janata company ltd., was formed to take over the business Niky and Nihal partnership
firm. The balance sheet of the firm as on 31-3-2011 was as under:
Liabilities
Creditors
Bills payable
Reserve fund
Capitals :
Niky
Nihal
Rs.
50,000
10,000
10,000
Assets
Machinery
Building
Stock
Investment
Cash
Rs.
1,50,000
60,000
70,000
10,000
30,000
1,00,000
1,50,000
3,20,000
3,20,000
Company took over all the assets and liabilities at their book value except investments
and agreed to pay for Goodwill Rs. 15,000
Calculate Purchase consideration.
6. Harish and Harsha entered into Joint Venture agreeing to share the profits and losses in
the ratio 2:1 Harsha purchased goods worth Rs.40,000 and Harsha goods worth
Rs.20,000
Harish sold ¾ of the goods for Rs.76,000 and paid for carriage Rs.5,000; godown rent
Rs.1,000; and insurance Rs.2,000. Harsha sold the remaining goods for Rs.26,000 and
paid for carriage Rs.2,400; insurance Rs.1,200 and sundry expenses rs.400.
Prepare memorandum joint venture account.
7. Prepare statement of affairs with imaginary figure (minimum 10 items)
Section C
8. Ramesh and Kumar were partners sharing profits and losses in the ratio of 2:1. Their
balance sheet as on 31-3-2011 was as follows:
Liabilities
Capital:
Ramesh
Kumar
Creditors
Bank overdraft
Reserves
Kumar’s loan
Rs. Assets
Cash
15,000 Bills Receivable
10,000 Debtors
20,000 Stock
10,000 Machinery
3,000
10,000
68,000
Rs.
5,150
2,500
28,500
21,850
10,000
68,000
On the above date the company agreed to take over the following asset at the value show
below: Machinery Rs.8,000; Stock Rs.17,500; Debtors Rs.25,350; Bills Receivable
Rs.2500 and Goodwill Rs.3,000.
The company took over creditors at Rs.19,500. The expenses of realization amounted to
Rs.150. The company paid the purchase consideration by allotment of 2,000 equity
shares of Rs.10/- each fully paid and the balance in cash.
Prepare necessary ledger accounts in the books of the firm.
9. Shri. Anna started a business on 1-1-2010 with a capital of Rs.25,000. He immediately
bought furniture for Rs.4,000. During the year he borrowed Rs.5,000 from Tamma and
introduced as additional capital of Rs.3,000. He had withdrawn Rs.600 at the end of each
month for domestic expenses. From the following particulars obtained from his books
which were maintained in single entry system. Prepare Total Debtors A/c; Total Creditors
A/c; Trading and Profit and Loss A/c for the year ending 31-12-2010 and Balance sheet
as on that date.
Sales (including cash sales Rs.30,000)
1,00,000
Purchashe (including cash purchase Rs.10,000)
75,000
Carriage inward
700
Wages
300
Discount allowed
800
Salary to staff
6,200
Bad debts written off
1,500
Trade expenses
1,200
Advertisement expenses
2,200
The owner of the firm used goods worth Rs.1,300 for domestic purpose and paid
Rs.500 for his son which were not recorded anywhere.
On 31-12-2010 Debtors were Rs.21,000 and Creditors Rs.15,000 and Closing Stock
Rs.10,000. His closing cash balance was Rs.27,400
Depreciate furniture by 10 %
10. Dharwad publishers agreed to take up the printing and sales of book form the Author. Mr.
Raj Kumar on 1-4-2007. The following are the terms of agreement:
i)
Royalty payable at 20% on the sale price of the book. The book is priced at Rs.30
per copy.
ii)
Author is to be paid the minimum amount of Rs.20,000 p.a.
iii)
Each year’s excess of minimum rent over actual royalties is recoverable out of
royalties of next two years.
The details are as under:
Year
No. of copies printed
No. of copies in closing stock
31-12-2007
3000
250
31-12-2008
3200
300
31-12-2009
3500
100
31-12-2010
3650
200
Prepare: Royalty A/c; Short working a/c and Mr. Raj Kumar’s A/c.
11. Arun and Basu entered into a joint venture. Arun agrees to bring in cash as capital.
Accordingly a joint bank account was opened by Arun for Rs.1,60,000 Basu buys goods
worth Rs.1,00,000 as part of his capital. Further goods worth Rs.2,36,000 were purchased
from Chandu paying Rs.1,20,000 and the balance by promissory note signed Arun and
Basu.
The goods were sent to Mysore for sale. Expenses of Rs.10,000 were incurred for
sending the goods. Part of the goods were damaged in transit and a sum of Rs.50,000
were recovered from the insurance company. The remaining goods were sold for
Rs.4,40,000
Prepare joint venture account and joint bank account
Arun a/c and Basu a/c by assuming that final settlement between them was made.
Case study
12. Amar, Basu, and Chandu were partners in a firm. They dissolved the firm on 1-1-2011
when their Balance sheet was as follows:
Liabilities
Capitals
Amar
Basu
Chandu
Creditors
Bank loan
Amar’s loan
Basu’s loan
Reserve Fund
Rs. Assets
Cash
35,000 Sundry assets
25,000
15,000
30,000
10,000
20,000
10,000
15,000
1,60,000
Assets realized as follows:
31-1-2001
28-2-2011
31-3-2011
Rs.
20,000
1,40,000
1,60,000
35,000
45,000
57,000
Advise the partners as to how to distribute the cash as and when realized by preparing
piecemeal distribution statement.
FIRST SEMESTER B.COM DEGREE EXAMINATION
FINANCIAL ACCOUNTING
November – 2010
Section A
1. Answer any ten of the following:
a) Who is insolvent partner
b) What do you mean by piecemeal distribution of cash
c) What is deficiency account
d) What is maximum possible loss?
e) State any two advantages of conversion of a firm
f) Give the journal entry to incorporate assets and liabilities in the books of
purchasing company
g) State any two benefits of single entry system
h) Prepare statement of affairs with imaginary figures
i) What is memorandum joint venture account
j) What is joint venture
k) What is royalty? State difference types of royalties
l) How do you calculate minimum rent in the event of strike
Section B
2. From the following particulars given below ascertain cash received from debtors:
Opening debtors
10,000
Total sales
70,000
Cash sales
10,000
Bills receivable received during the year
30,000
Bills receivable dishonored
4,000
Bad debts
1,000
Discount allowed
3,000
Reserve for doubtful debts
500
Return inwards
5,000
Closing debtors
10,000
3. Find out excess capitals from the following particulars
X, Y, Z are partners, sharing profits and losses in the ratio of 1/2: 1/3: 1/6
respectively. They decided to dissolve their firm when their capital balance stood as
follows: X: 6,00,000; Y:8,00,000; Z:10,00,000
4. A coal company took a mine on lease from Mr. Anil at a royalty of Rs.8 per tonne of
coal raised with a minimum rent of Rs.40,000 per annum. Each year’s excess of
minimum rent over the royalties is recoverable out of the excess royalties of next two
years. In the event of strike, if the royalties not reached minimum rent, the lease
provided that the actual royalties earned for the year discharge all the rental
obligation for that year.
The quantity of coal raised was as under:
Year
Output in tonnes
2006
3500
2007
4500
2008
5500
2009 (strike)
4500
Prepare royalty chart
5. Anil purchased goods of the value of Rs.4,50,000 and sent them to Sunil to be sold by
him on joint venture. Profits and losses are to be shared equally. Anil paid Rs.3,000
towards freight. Anil drew on Sunil for Rs. 1,50,000 and he discounted it for
Rs.1,47,000. Sunil received the goods and paid Rs.7500 towards insurance. Sunil sold
whole of the goods for Rs.6,75,000. Sunil settled the account by a bank draft after
deduction of Rs.4500 towards carriage.
Prepared a memorandum joint venture account
6. The following is the Balance sheet of A and B, who share profits and losses in the
ratio of their capitals as on 31-12-2009.
Rs.
Rs.
Liabilities
Assets
Creditors
5,50,000 Cash
45,000
Reserve
70,000 Debtors
4,00,000
Capitals
Stock
3,70,000
A
7,50,000
Plant
8,50,000
B
5,00,000
12,50,000 Investment
2,05,000
18,70,000
18,70,000
The firm was sold to Sunil and company on the following terms:
a) The creditors were taken over at book value
b) The company agreed to pay Rs.50,000 for goodwill
c) The company took over all the assets at 10% less than the book values
d) Investments are taken over at book value
e) Purchase price was paid half in cash and half in fully paid shares of Rs.10/- each
of the company
Calculate Purchase consideration
7. Explain the steps to be taken to convert single entry into double entry system of book
keeping
Section C
8. X, Y, and Z firm decided to dissolve on 31-12-2009. On that date their Balance Sheet
as follows:
Rs.
Rs.
Liabilities
Assets
Creditors
15,000 Cash
4,000
Reserve
6,000 Other assets
66,000
Capital accounts
X
28,000
Y
18,000
Z
3,000
49,000
70,000
70,000
The other assets realized 50% of their book values. The dissolution expenses amounted to
Rs.3,000. Z became insolvent and was unable to contribute anything from his private
estate.
Show the necessary accounts as per Garner Vs Murray Rule
9. X, Y, Z were partners sharing profits and losses in the ratio of 2:1:1. The
was their balance sheet as on 31-12-2009 when they dissolved their firm:
Rs.
Liabilities
Assets
Sundry creditors
25,000 Cash
Bills payable
25,000 Stock
Z’s loan
10,000 Sundry Debtors
Reserve Fund
20,000 Furniture
X’ Capital
60,000 Building
Y’s Capital
80,000
Z’s Capital
1,00,000
3,20,000
The assets realized as follows:
I installment
50,000
II installment 60,000
III installment
80,000
IV installment 60,000
Prepare a statement of piecemeal distribution of cash
following
Rs.
20,000
40,000
60,000
80,000
1,20,000
3,20,000
10. Amit and Sumit entered into a joint venture business to purchase lands and to sell
plots. Amit contributed Rs.1,00,000 and Sumit Rs.50,000 and they opened a joint
bank a/c with SBI and deposited the above amounts.
The transaction of the venture were as follows:
Purchase of land
Rs.80,000
Legal expenses incurred
Rs.10,000
Land development expenditure
Rs.48,000
Establishment expenses paid by Amit
Rs.7,000
Other expenses paid by sumit
Rs.5,000
Sales proceeds of ½ of the land
Rs.80,000
Sale proceeds of other ¼ of land
Rs.50,000
Remaining land taken over by Amit
Rs.35,000
Prepare joint venture account. Joint Bank account and Amit and Sumit’s account.
11. Mr. Ram furnishes the following particulars and request you to prepare his final
accounts:
A) Assets and Liabilities
1-1-2009
31-12-2009
Cash in hand
1,000
3,000
Bills receivable
25,000
35,000
Debtors
40,000
50,000
Stock
70,000
75,000
Plant and Machinery
40,000
40,000
Building
60,000
60,000
Creditors
36,000
40,000
Bills payable
20,000
25,000
Capital
1,80,000
B) Cash transaction during the year :
Receipts:
From debtors
2,00,000
From bills receivable
1,00,000
Payments:
Salary
10,000
Wages
15,000
Bills payable
1,20,000
Creditors
1,40,000
General Expenses
8,000
Drawings
5,000
C) Other information:
Discount allowed
2,000
Discount received
1,000
Prepare Trading & Profit and Loss account for the year ending 31-12-2009 and Balance
Sheet as on that date.
12. Karnataka Ltd., took a coal mine on lease at a royalty of Rs.2 per tonne of coal raised
with a dead rent of Rs.80,000 per annum subject to the right of recoupment of short
workings in the next two years. In the event of strike, dead rent be reduced
proportionately to the period of strike.
The output during the 5 years was:
Years
Output in tonnes
2005
20,000
2006
36,000
2007
50,000
2008 (strike for 3 months)
24,000
2009
60,000
Prepare the necessary accounts in the books of Karnataka Ltd.
13. Case study: Compulsory question on amalgamation (not in syllabus)
FIRST SEMESTER B.COM DEGREE EXAMINATION
FINANCIAL ACCOUNTING
November – 2009
Section A
1) What is meant by purchase consideration
2) State any two merits of amalgamation of firms
3) What is minimum rent
4) State any two demerits of single entry system
5) Why total debtors account is prepared
6) What do you mean by gradual dissolution
7) What is copy right royalty? Give two example
8) What is joint venture
9) State the Garner Vs Murray rules
10) State any two advantages of conversion of partnership
11) Who is co-venture
12) State two distinction between statement of affairs and balance sheet
Section B
2. Difference between dissolution of partnership and dissolution of firm
3. A, B and C are partners sharing profits and losses equally. They decided to dissolve their firm.
Their balance sheet after realization of assets and payments of liabilities was as under on 31-122008
Liabilities
Amount Amount
Assets
Capital Accounts
Cash at Bank
29,600
A
40,000 Realisation loss
68,400
B
20,000
C
8,000
Reserve fund
21,000
P/L a/c
9,000
98,000
98,000
C becomes insolvent. He is unable to bring anything towards his deficiency. Prepare a) Bank
account b) Capital accounts of partners.
4. Anand, Ravi and Sunil are partners sharing profits and losses in the ratio 5:3:2 respectively.
The following is their Balance sheet as on 31.03.2007 when they dissolved their firm.
Liabilities
Amount Amount
Creditors
40,000 Sundry assets
Mrs. Anands Loan
10,000
Capital A/cs
Anand
50,000
Ravi
15,000
Sunil
45,000
Assets
1,60,000
1,60,000
The assets realized in installment as under:
I installment Rs.30,000
II installment 73,000
Prepare a statement showing distribution of cash
1,60,000
III installment 47,000
5. Kaveri Co., Ltd took a coal mine on lease at a royalty of Rs.2 per ton of coal raised with a
dead rent of Rs.40,000 per annum subject to the right of recoupment with a short workings
during the next two years. The lease provided that in the event of strike, the dead rent be reduced
proportionately to the period of working.
The output during the first five year was as under:
Year ending
output in tonnes
31-3-1997
10,000
31-3-1998
18,000
31-3-1999
25,000
31-3-2000
12,000 (strike for 3 months)
31-3-2001
30,000
Prepare Royalty chart.
6. Anand and Company bought goods of the value of Rs.30,000 and sent them to Amin & Co. to
be sold by them on joint Venture. They agreed to share the profits equally. They also paid
Rs.2000 for freight and insurance. Anand & Co. drew a bill on Amin & co. for Rs. 10,000. The
bill was discounted for Rs. 9800. Amin & Co. paid Rs.500 for carriage and godown rent. They
whole of goods for Rs. 45000. Their expenses in connection with the sales being Rs. 300. They
sent a draft to Anand & Co. for the amount due to them.
Show memorandum joint venture account.
7. Ascertain total sales from the following particulars:
Opening balances of bills receivable
Opening balance of Drs.
Closing balance of bills receivable
Closing balance of Drs.
Collection from debtors
Bills receivable received
Return inward
Bad debts
Provision for doubtful debts
Cash sales
10,000
12,000
14,000
8,000
60,400
17,800
2,000
400
2,700
51,000
Section C
8. Red & Co. was formed to take over the running business of M/s. Red & Blue who shared
Profits and losses in the ration of 3:2 . The balance sheet of Red and Blue is :
Liabilities
Creditors
Bills payable
Mrs. Red’s Loan
Capitals A/c.
Amount
20,000
10,000
4,000
Amount
Building
Machinery
Stock
Debtors
Red
60,000 Investments
Blue
40,000 Goodwill
Bank
1,34,000
Assets
42,000
20,000
22,000
28,000
5,000
15,000
2,000
1,34,000
The company agreed to take over the assets as under:
Machinery Rs.15000, Building Rs.60,000; stock Rs.20,000; Debtors Rs.25,000; Goodwill
Rs.20,000.
The company also agreed to take over the creditors and bills payable at book value. The firm
retained the investment and sold them for Rs.6000 and paid Mrs. Red’s loan
The purchase consideration was settled by the issue of 10000 equity share of Rs. 10 each as fully
paid and balance in cash.
9. Mr. Nandu, a retail trader who keeps his books under single entry system, gives you the
following information for the year 2008.
Summary of cash transactions
Receipts
Amount Payments
Amount
To Balance B/d
8,350 By creditors
27,100
Sundry debtors
38,400 ” Bill payable
9,300
Bills receivable
12,000 Wages
12,250
Rent
1,500 Salaries
6,500
Cash Sales
8,600 Taxes and insurances
5,200
Domestic expenses
7,520
Advertisement
330
Balance C/d
650
68,850
68,850
His assets and liabilities other details are as follows:
1-1-2008
Stock
18,700
Sundry debtors
12,000
Sundry creditors
9,000
31-12-2008
23,400
14,000
1,500
Bills receivable
Bills payable
Furniture
Buildings
4,000
1,000
600
12,000
5,000
200
600
12,000
Adjustments for the year 2008:
i)
Provide Rs.1450 for doubtful debts on debtors
ii)
Depreciation furniture by 5%
iii)
Salaries payable Rs.1,200
iv)
Insurance unexpired Rs.200
Prepare trading and Profit and loss a/c for the year ending 31-12-2008 and Balance sheet
10. Karnatak Co., ltd. Obtained on 01-01-1996 the patent right of a grinding machine from
Krishna ltd under the following terms.
a) A royalty of 2% on sales subjects to a minimum amount of Rs.20,000 p.a.
b) Karnatak Ltd., will have the right of recouping short working in the next two years.
Sales during the first five years were as under:
Year
Sales
1996
4,00,000
1997
7,00,000
1998
10,00,000
1999
12,00,000
2000
19,00,000
11. Problem on amalgamation
12. Mahesh and Umesh undertake a building construnction work jointly. The contract price of
Rs.2,50,000 is payable as Rs.2,00,000 in cash and Rs.50,000 in shares. They opened joint bank
account. Mahesh deposited Rs.75,000 and Umesh contributed Rs.40,000. They agreed to share
the profits and losses in the ratio of 2:1 respectively. The transaction of venture are as under:
a) Materials purchased Rs.1,70,000
b) Wages paid Rs.45,000
c) Materials supplied by Mahesh Rs.10,000
d) Materials supplied by Umesh Rs.7,000
e) Architects’ fees paid by Umesh Rs. 3,000
The building construction was duly completed and contract price duly received. Mahesh takes up
shares at an agree value of Rs. 45,000 and Umesh takes up closing stock at Rs.8,000
Prepare a) Joint Venture a/c
b) Joint Bank A/c
c) Co-ventures a/c
FIRST SEMESTER B.COM DEGREE EXAMINATION
FINANCIAL ACCOUNTING
November – 2008
Section A
1. Answer the following
a) What is the rule of Garner Vs. Murray’s case
b) How do you close the capital accounts of the partners, when all partners become
insolvent and the liabilities are not passed through the realization account
c) What do you mean by piecemeal distribution of cash
d) What do you mean by realization account ? how do you close it
e) What is net asset method of calculating purchase consideration
f) State any two problems of amalgamation of firms
g) Difference between revaluation and realization account
h) State any two merits of single entry system
i) Why do prepare the bills receivable account
j) State any two objectives of forming joint venture
k) What is royalty
l) What do you mean by minimum rent
Section B
2. Difference between partnership and joint venture
3. Problem on dissolution
4. Find out credit purchases:
Opening creditors
30,000
Opening bills payable
15,000
Cash and cheque paid to creditors
(including Rs.10,000 to X ltd for machine bill)
1,51,000
Return outwards
6,000
Freight charged
10,000
Bills payables discharged
40,500
Discount allowed
5,000
Cash purchase
1,15,000
Closing creditors
20,000
Closing bills payable
25,000
Bills payable dishonored
1,000
Note: opening creditors includes Rs.10,000 to X ltd.,
5. The following is the balance sheet of A and B who share Profit and losses in the ratio of
their capitals as on 31-12-2007:
Liabilities
Amount Assets
Amount
Creditors
55,000 Cash
4,500
Reserve Fund
7,000 Debtors
40,000
Capitals
A
B
Stock
75,000 Plant
50,000 Investment
1,87,000
37,000
85,000
20,500
1,87,000
The firm was sold to a limited company on the following terms:
1) The company was to purchase the whole concern except cash and investment at 10%
less than the book value
2) The creditors were taken over at the book value
3) The company agreed to pay Rs.5,000 for goodwill
4) The purchase price was paid half in cash and half in fully paid shares of company
Calculate purchase consideration
6. A and B entered into joint venture to consign 100 bales to C to be sold on their joint risk.
They agreed to shares profits and losses equally.
A sent 50 bales valued at Rs.60,000 and pays freight and expenses Rs.1200
B sent 50 bales valued at Rs.55,000 and paid expenses Rs.900
All bales reached to C. However 5 bales were found to have been tempered with during
the transit. A recovered Rs.3,000 from the insurance company. C sold the reaming bales
for Rs. 1,35,000. He charged 3% as selling commission and deducted Rs.1,500 towards
expenses. He remitted the balance amount to A by DD
Prepare Memorandum Joint Venture account.
7. Bihar Coal ltd got the lease of colliery on the basis of royalty of Rs.1 per ton of coal
raised subject to a minimum rent of Rs.40,000 per annum. The tenant has the right to
recoup shortworking during the first four year of the lease and not afterwards.
The output in 5 year was as:
I year
18,000 tonnes
II year
26,000 tonnes
III year
50,000 tonnes
IV year
60,000 tonnes
V year
1,00,000 tonnes
Prepare royalty chart
Section C
8. Kishore and kumar were partners in a firm sharing Profit and losses in the ratio of 2:1 and
their balance sheet as on 31-12-2007
Liabilities
Amount
Assets
Amount
Sundry creditors
9,000 Cash
67
Loan from kundan
2,250 B/R
1,125
Bank OD
5,017 Debtors
13,500
Capitals
Less: RDD
675
12,825
Kishore
9,000 Stock
11,250
Kumar
4,500 Plant
4,500
29,767
29,767
The business of the firm was sold to a company on the above date at the following
valuation:
Sundry debtors Rs.12,150; Stock Rs.9,900; Plant Rs.5,445 and other assets and liabilities
at their book values. The company agreed to pay Rs.7,830 for Goodwill
The purchase price was paid as Rs.13,500 in Rs. 1/- fully paid equity shares in the
company and Rs.6,750 in cash. The shares were distributed between partners in
proportion to their capitals just before sales of the business.
Prepare necessary ledger accounts
9. Raman publication agreed to over printing and sales of a book from the author Sumati.
The following are the terms of agreement:
a) Royalty payable is 20% on the sale price of books. The book is priced at Rs.25/- per
copy
b) The author is to be paid the minimum rent of Rs.10,000 per annum
c) Each year excess of minimum rent over the actual royalties is recoverable out of the
royalties during the next three years period.
The following are the particulars of sales:
Year
No. of copies sold
Year ending 31-12-2003
400
Year ending 31-12-2004
750
Year ending 31-12-2005
1600
Year ending 31-12-2006
3000
Year ending 31-12-2007
4500
Show minimum rent a/c, royalty a/c, shortworking a/c and author a/c in the books of
Raman publication for the above period.
10. A, B and C were partners sharing profit and losses in the ratio 3:2:1. The following is
their Balance sheet as on 31-12-2007: Liabilities
Rs.
Assets
Rs.
Creditors
9,000
Machinery
10,000
Bills payable
6,000
Debtors
13,000
Capitals
Stock
8,000
A
15,000 Building
20,000
B
18,000 Cash
3,000
C
6,000
54,000
54,000
It was decided to dissolve the firm. The asset were realized in instalment as follows:
Jan: 2008
Rs.9,000
Feb: Rs.12,000
Mar: Rs. 18,000
Prepare a statement showing the distribution of cash among the partners as and when
assets were realized under proportionate capital method.
11. X and Y entered into Joint Venture. X brought Rs.80,000 and deposited in a Joint Bank
Account. Y brought goods for Rs.50,000 as part of his share of initial contribution. The
goods worth Rs.1,18,000 were purchased from Z paying Rs.60,000 and balance by a
promissory note signed by X and y duly discharged on due date. The goods were sent to
Hubli for sale. Expenses of Rs.5,000 were incurred in sending the goods. Part of goods
were damaged and a sum of Rs.25,000 were recovered from insurance company. The
balance goods were sold for Rs.2,20,000. Venturers share profit equally.
Prepare necessary ledger accounts.