Asian College of Higher Studies (ACM)

Grade-XII SET-----A FM:100

Subject:- Accounting-II PM:40

Time: 3 Hrs

Third Term Exam-2012

Q.1. Give the meaning of public company and mention any two features. 3

Q.2. Distinguish between equity share & Debenture. 2

Q.3. Give the meaning of financial statement analysis. Mention any two objectives. 3

Q.4. Show any two limitations of Ratio analysis. 2

Q.5. Give the meaning of material control. 2

Q.6. Show differences between financial accounting & cost accounting. 3

Q.7. Write in brief the classification of cost on the basis of behavior. 3

Q.8. Give the meaning of absorption of overhead with suitable examples. 2

Q.9. AB co. registered with the share capital of Rs.5,00,000 divided into 5,000 equity shares, issued 4,000 shares for public subscription. The share money was payable as on application Rs.30, on allotment Rs.50(including premium of 10%) and balance on calls. All the shares were subscribed and allotted. All the money was received on due date.

Required:- Journal entries for application & allotment 1+2=3

Q.10. Kathmandu Co issued 50,000 equity shares of Rs.100 each payable at a discount of 5% payable as Rs.30 application, Rs.50 on allotment and balance on first & final call. The applications were received for 75,000 shares and the allotment was made as under:

To the applicants of 5,000 shares--- Nil

To the applicants of 20,000 shares----100%

To the remaining---pro-rata basis

All the calls were made and money was realized excepting from a shareholder who had applied for 5,000 shares allotted on pro-rata basis, failed to pay money due on allotment and calls. Subsequently his shares were forfeited through a resolution of directors.

Required:- Journal entries for allotment, calls & forfeiture 2+2+2=6

Q.11. Brother co. acquired the following business of Sister co. by issuing 5,000 equity shares of Rs.100 at 120%.

Machinery Rs.1,50,000 Creditor Rs.50,000

Debtors 60,000 Unearned income Rs.5,000

Advance Expenses Rs.10,000 15%Loan Rs.1,20,000

Salaries due Rs.20,000 Inventory Rs.15,000

Required:- Journal entries for business purchase 3

Q.12. A commercial bank issued 15% debenture of Rs.30,00,000 at a premium of 10% which was redeemable after two years at a premium of 20%.

Required:- Journal entries for issue & redemption 4

Q.13. The following is the trial balance of a business as on 31^st Ashadh, last year.

Dr balance	Amount Rs.	Cr balance	Amount Rs.
Stock Plant & machinery Bills receivable Bad debts Cash & bank Commission & discount Trade debtors Interest on Debenture Goodwill written off Income tax paid Dividend paid Underwriting commission Salaries & allowance Prepaid rent	20,000 1,00,000 50,000 4,000 1,20,000 6,000 60,000 5,000 10,000 7,500 12,000 50,000 25,000 8,000	Acceptance Provision for taxation Provision for bad debts Share capital@Rs.100each Gross profit Retained earning 15% Debenture	17,000 8,000 1,500 2,50,000 51,000 80,000 70,000
	4,77,500		4,77,500

Adjustments:

a) Debenture interest is payable for eight months only. Depreciate machinery by 15% p.a.

b) Authorized capital of the company is divided into 5,000 shares.

c) Rent expired to the extent of Rs.5,000 & commission earned but not received Rs.12,000.

d) Increase provision for bad debts by 4% after writing off bad debts Rs.6,000.

e) The BOD decided to pay dividend @ Rs.5 per share & transferred to General reserve Rs.20,000.

Required:- Profit & Loss account; Profit & Loss appropriation account & Balance sheet 5+2+5=12

Q.14. A business firm gives you the following trial balance.

Debit balances	Amount Rs.	Credit balance	Amount Rs.
Purchase Furniture & Fitting Cash & bank Preliminary exps Interim dividend Salaries & wages Calls in arrears	60,000 1,80,000 1,20,000 1,40,000 10,000 25,000 15,000	15% Loan Share capital Retained earning Sales Commission unearned Provision for tax	40,000 2,80,000 50,000 1,50,000 16,000 14,000
Total	5,50,000	Total	5,50,000

Additional information:-

a) Stock at close Rs.10,000.

b) Commission earned Rs.5,000.

c) Proposed dividend Rs.12,000.

Required:- Adjusting entries & work sheet(Twelve column) 2+6=8

Q.15. You are given the following information.

Current ratio 2:1 Stock Rs.20,000

Prepaid expenses Rs.5,000 current liabilities Rs.50,000

Share capital Rs.1,40,000 General reserve Rs.20,000

12% Debenture Rs.1,00,000 P/L Account Rs.50,000

Fixed assets turnover ratio 5 times Fixed assets Rs.1,40,000

Net profit before interest & taxes 20% of sales(Tax rate 40%)

Required:- i)Quick Ratio ii) Return on assets iii) Return on shareholders’ equity 1+2+2=5

Q.16. The following information is given.

Net profit during the year Rs.55,000.

Depreciation on machinery Rs.10,000.

Goodwill written off Rs.22,000.

Transfer fee received Rs.15,500.

A part of plant costing Rs.25,000, book value being Rs.15,000 sold for Rs.14,000.

Issue of share Rs.1,30,000

Repayment of loan Rs.70,000.

Required:- i) Funds or Loss from operation ii) Funds flow statement 3+2=5

Q.17. You are given the following information.

Opening Rs. Closing Rs.

Share capital 3,00,000 4,50,000

12% Debenture 1,00,000 ---

Provision for Tax 15,000 20,000

Machinery 50,000 1,20,000

Investment 1,20,000 40,000

Creditors 46,000 60,000

Stock 40,000 30,000

Debtors 25,000 45,000

Bank overdraft 70,000 1,20,000

Other information:

§ Cash Sales Rs.1,20,000 & credit sales Rs.2,30,000.

§ Cost of goods sold Rs.1,20,000, Tax paid Rs.10,000.

§ Operating expenses Rs.80,000 including depreciation of Rs.10,000 & interest Rs.12,000.

§ Investment was sold at a profit of Rs.13,000 & debenture was repaid at 10% premium.

§ Cash & Bank at the beginning of the year Rs.1,20,000.

§ Dividend paid during the year Rs.20,000.

Required:- Cash Flow Statement showing closing cash balance( using direct method) 4+3+3=10

Q,18. A worker produced 600 units of output during a week. The standard wage rate per hour is Rs.120. The standard time allowed for a unit is 10 minutes.

Required:- Total weekly wages applying Time rate system 2

Q.19. A supplier gives you the following information.

Annual requirement 6,00,000 kgs @ Rs.10 each Kg

Cost per order Rs.120

Carrying cost 10% of average inventory

Required:- EOQ & No of orders 2+1=3

Q.20. A storekeeper undergoes the following transactions.

Magh-1, Issued 5,000 units

------10, purchased 2,000 units @ Rs.5 each.

------12, issued 1,200 units

------14, return to store 20 units

-------20, Order received 4,000 units Rs.18,000.

-------30, Shortage found 15 units on physical verification.

There was stock of 6,000 units valued Rs.24,000 at the beginning of the month.

Required:- Store ledger under FIFO 5

Q.21. A manufacturing concern gives you the following information.

Materials stock at the beginning Rs.15,000 & at the end Rs.20,000.

Work-in-progress at the end Rs.25,000.

Units produced 25,000 & Sold during the period 20,000 units

Purchase of materials Rs.1,25,000

Carriage on purchase Rs.12,500

Direct expenses Rs.10,000

Labour cost Rs.40,000

Indirect materials Rs.5,0000

Indirect labour Rs.10,000

Other factory overhead 10% of wages

Income tax paid Rs.12,000

Office overhead 25% of work cost

Selling expenses @ half a rupee per unit

Estimated profit 20% of selling price

Required:- A statement of cost & profit showing elements of Cost 10

Q.22. On reconciliation between cost & financial account, the following facts are brought to notice.

a) Net profit after tax as per Financial records Rs.44,000

b) Opening stock undervalued in cost account Rs.5,500.

c) Closing stock found in excess in Financial account Rs.1,500.

d) Depreciation charged in cost records Rs.10,000 & in P/L account Rs.11,200.

e) Interest on debenture Rs.5,000 & Income from Government bond Rs.6,500 were recorded in financial accounts.

Required:- Cost Reconciliation statement 5

Best of luck