BCH201

Roll No. BACHELOR OF COMMERCE (HONS) - I SECOND SEMESTER EXAMINATION APRIL 2013 FINANCIAL ACCOUNTING II (Sample Paper 21)

Time : 3 Hrs.

Maximum Marks : 70 Note: Attempt questions from all sections as directed SECTION A
Attempt any 5 questions. Each question carries 6 marks

(30 MARKS)

1.

The following trial balance extract as at 31December 2012 is given below

Trial balance (extract) as at 31 December 2012 Equipment 120,000 Rent 64,000 Debtors 12,000 Fees 38,900 Interest on loan 2,000 Prov. For Doubtful debts 3700 Advertising 11,900 Accum. Depn Equipment 6,000 Additional details: a) Interest rate on loan Rs50,000 is 9% p.a. b) 30% of Advertising has been prepaid c) Rent is Rs1,500 per month d) Depreciate Equipment @ 15% p.a using Diminishing Value method e) Fees accrued Rs15,000 f) Create a provision of 12% p.a on debtors.

Required: Prepare adjusting journal entries for (a-f). (Narrations not required)
2. a) From the details given in (Question 1) above, prepare Closing journal entries b) Explain briefly the purpose of preparing Adjusting and Closing journal entries. 3. In the books of Joytishwar & Associates, the following details were highlighted.

a) For payment of electricity by cash of Rs5,000 was recorded in the books as Wages Rs2,000DR
Cash at bank Rs2,000CR

b) Goods sold to Ruchi Shukla for Rs190,000 had been omitted and goods sold to Bhavesh for
Rs5,000 had been debited to Bhavik for Rs15,000. (Sales had been updated in this case only).

c) A purchase of stationery for Rs2,000 on account had been posted as a debit to Rent expense and credit to Creditors. d) Repairs to Computer had been debited to Computers for Rs2,900 and credited to cash. e) A purchase of Machinery for Rs120,000 was posted as a debit to Cash at Bank account and credit to the Machinery account f) A payment for Salaries expense of Rs2,000 was omitted from the trial balance and stock taken by the owner for personal use of Rs7,000 was credited to capital account . Required: Prepare journal entries to rectify the errors (if any)

4. From the following details provided by Shankar Traders as at 1 January 2013, prepare Opening
entries. Debtors Rs42,000; Prov. For Doubtful debts Rs2,900; Equipment Rs180,000; Accum DepnEquipment Rs15,900; Land Rs190,000; Motor vehicles Rs90,000; Accum Depn- Motor vehicles Rs29,000; Loan to Bhavesh Rs50,000; Prepayments Rs6,700; Income Accrued Rs24,800; Opening inventory Rs20,000, Cash on hand Rs1,000; Creditors Rs39,000; Income in advance Rs5,900; Loan from Axis Bank Rs100,000; Bank overdraft Rs35,000; Expenses due Rs12,770.

5. On October 3, 2012 Vibha Holdings discounted the bill at the bank @ 15%. The following details
were provided. Term of the bill in days 90; Number of days in September 30; Date of the bill discounted 3/10/12; Number of days held in September 27; Number of days held in October 3; Total days held by Vibha Holdings 30; Discount period in days 60; Face value of the Bill Rs10,000, Interest rate 12% p.a for (90 days); Discount rate @ 15% for (60 days) Required: a) Compute the proceeds receivable by Vibha Holdings. b) Show the relevant journal entries to record the discount transactions. 6. Write Short notes on each of the following a) Describe the four(4) types of errors in financial statements with examples. b) Operating Expenses and Non Operating Expenses with atleast (3) examples for each. c) Reasons for and against preparing final accounts using the traditional and modern format

SECTION B Attempt any two questions Each question carries 10 marks

7.

(20 MARKS)

The Suva Soccer Club has the following financial information for the half year ended 30 September 2012. Assets Stock of refreshment Rs120; Furniture and equipment Rs300; Subscriptions due Rs10; Cash at bank Rs160 Liabilities Subscriptions prepaid Rs30; Creditors for Refreshments Rs30 Summary of Receipts and Payments

Subscriptions received Rs360; Sale of old Equipment (Book value Rs70) for Rs98; Donations Rs30; Social function receipts RsRs250; Refreshment sales Rs360; Sundry expenses Rs30; Refreshment purchases Rs190; Social expenses Rs100; Printing and stationery Rs30; Purchase of new equipment(30-9-12) Rs480; Bar creditors Rs250
Other Details:

i) ii) iii)
iv)

Ending stock of refreshments on hand Rs480 Creditors unpaid (refreshments) Rs170 Depreciate furniture & equipment at 15% p.a (on 1April value) Subscriptions due not received Rs50

Required: a) Prepare a Statement of Receipts and Payments (in vertical format) for the half year 30 September 2012. b) Prepare an Income and Expenditure Statement (in vertical format) for the half year 30 September 2012 c) State briefly the differences between an Income and Expenditure Statement and a Profit and Loss Statement.

8. The following details were provided by Flour Mills of Fiji for the year ended 30 December
2012. Work-In-Progress Stock(Opening) Rs25,900; Raw materials Stock (Opening) Rs165,000; Work-InProgress Stock (Ending) Rs19,900; Raw materials Stock (Ending) Rs25,000; Cartage In Rs2,000; Purchases of Raw materials Rs120,000; Freight Outwards Rs3,900; Advertising Rs15,000; Bad debts Rs100; Direct wages Rs37,750; Factory heating and power Rs19,700; Factory managers salary Rs27,900; Depreciation on Delivery Vehicle Rs5,900; Depreciation of plant and machinery Rs19,600; Purchase of Computer for factory Rs48,000; Indirect labor cost Rs25,000; Indirect materials cost Rs17,800; Factory rent Rs12,000 Required: Prepare a Manufacturing Statement of Flour Mills of Fiji for year ended 30 December 2012.

9. The following details were provided by Shiri Pande Emporium Purchases Rs120,000; Opening stock Rs20,000; Returns Inwards Rs1,000; Duty Rs2,900; Returns Outwards Rs1,900; Sales Rs150,000; Store wages Rs12,000; Cartage Inwards Rs5,000; Cartage Outwards Rs2,800; Depreciation Equipment Rs10,000; Bad debts Rs120. Additional details: Ending stock Rs16,800; Owner withdrew cash Rs7,500 and stock of Rs5,000 for personal use. Required: a) Prepare the Closing entries to be entered in the Trading Statement from the given details b) Prepare a Trading Statement (Vertical format) of Shiri Pande Emporium for the year ended 30 December 2012.

SECTION C (Compulsory) The following details are for Maruti Traders

Opening stock Debtors Purchases Cartage Inwards Returns Inward Cartage Outwards Drawings Office Salaries Salesmen - Commission - Salaries Rent paid Interest Discount Allowed Equipment Delivery Vehicles Bad debts Postage Stationery Advertising Insurance Electricity Telephone Repairs & Maintenance

(20 marks)

Maruti Traders Trial Balance ast at 31 December 2011 5,000 Sales 120,000 9,670 Capital 300,000 270,000 Discount received 2,900 1,000 Rent received 35,900 2,000 Creditors 45,970 3,900 Cash at bank 45,900 10,000 Loan 132,000 90,000 Returns Outward 2,900 20,000 Bad debts recovered 5,273 Provision for Doubtful 65,000 Debts 500 12,000 Accum-depn - Equipment 8,400 Accum-depn - Delivery 2,000 vehicles 26,000 100 60,000 120,000 100 4,700 12,900 12,987 13,800 3,976 3,740 2,870

725,743
Additional Details:

725,743

1) 2) 3) 4) 5) 6)

Closing stock Rs15,000 Office salaries due Rs5,000 Insurance prepaid Rs1,000 Stationery on hand on balance day was Rs5,000 20% of Rental income was received in advance. Provide for depreciation @ 7% p.a on Equipment and at 10% p.a on Delivery vehicles (both on cost) 7) Write off further bad debts of Rs200 and provide for doubtful debts @ 10% p.a

Required: Prepare a fully classified Profit and Loss Statement and Balance Sheet using the Modern method as at 31 December 2011