UNIVERSITY OF KOTA, EXAMINATION PAPER - 2012 B.

Com (Part - I) Examination Accountancy & Business Statistics Paper - I (Financial Accounting)
Time Allowed: Three Hours Maximum Marks: 100 Section A Maximum Marks: 10 This section contains one question which is compulsory sub divided into 10 parts. The answer should not exceed 20 words. Each question carries equal marks. Section B Maximum Marks: 50 This section contains 10 questions. Select one question from each unit answer 5 questions only. The answer should not exceed 250 words each. All questions carry equal marks. Section C Maximum Marks: 40 This section contains four questions. Answer any two questions. The answer should not exceed 500 words each. All questions carry equal marks.

Section A 1. (i) What is Employee Stock Option Plan? (ii) What do you mean by Sweat Equity Shares? (iii) How much is the maximum rate of underwriting commission? (iv) What is the maximum limit of managerial remuneration under section 198 of the Companies Act, 1956? (v) What is sub-lease? Explain. (vi) What is Average Clause? (vii) When Branch Stock Reserve Account is prepared? (viii) How the shortage in Branch Stock is treated in stock and debtors method? (ix) What do you mean by Shadow Accounts? (x) If profit on hire purchase price is 33 %, cost is Rs.12,000. Find out the hire purchase price. Section B Unit-I 2. Give salient features of Accounting Standard-6 on Depreciation Accounting.

3. On 31st December 2010 Pooja Ltd. Had outstanding Rs.10,00,000 in 7% Debentures of Rs.100 each redeemable at a premium of 5% on 28th Feb. 2011. On 1st January 2011 it was decided to give the holders of these debentures the following options: (i) To convert their holding into 9% preference shares of Rs.100 each at par. (ii) To accept new 8% debentures of Rs.100 each at Rs.94.50 per debenture or (iii) To accept cash upto 28th Feb. 2011. The holders of 4,000 debentures had excercised their option for 9% preference shares, holders of 3,600 debentures for new 8% debentures and the remaining debentures were paid in cash. Find out: (a) The nominal value of preference shares issued. (b) The nominal value of new 8% debentures issued and its discount, and (c) The amount paid in cash to the debenture-holders. Give necessary journal entries also. Unit-II 4. What is Managerial Remuneration? Discuss the provisions of Company Act, 1956 regarding Managerial Remuneration. 5. Ram was working as a sole trader. He sold his business to Ram Ltd. The company took over the following assets and liabilities: Building Rs.60,000 Machinery Rs.30,000 Furniture Rs.10,000 Debtors Rs.50,000 Investments Rs.5,000 Creditors Rs.60,000 Provision for Bad and doubtful debt Rs.5,000 Ram guaranteed that the debtors would realize Rs.45,000 and creditors would not exceed the book figure. The debtors actually realized Rs.43,000 and creditors amounted to Rs.62,000. The company issued 2,000 equity shares of Rs.100 each and these were duly taken by the public and paid for, Ram was issued 850 equity shares of Rs.100 each in part payment of his consideration and the remaining amount was retained towards his guarantee amounts. Ram further guaranteed that the profit of the company during each of the first three years would be suffcient to declare a dividend of at least 6%. The profits for the first year were only so much that a dividend of 5% could be declared for the year. During the second year the dividend was declared @7%. During the third year again the

profits were only so much that a dividend of 4% could be declared. During the First and Third year, the deficiency of profits was met out of Rams Guarantee Account before proposing dividend for the concerened year. Give the necessary journal entries relating to the purchase of the business and issue of shares in the books of the company. Also give Rams Guarantee Account in the books of the company, assuming that his share of dividend was retained by the company. Unit-III 6. What is Consequential Loss Policy? What factors do influence the ascertainment of claim under this policy? 7. Ram took a property on lease from Shyam for five years at a Royalty of Rs.10 per ton, subject to a minimum rent of Rs.40,000 per annum. Minimum rent paid in excess of actual royalties is recoverable during the next three years succeeding the year in respect of which excess was paid. In the event of a strike, the minimum rent will be reduced proportionately in relation to time lost. The first year in respect of which the minimum rent was payable expired on 31st December 2007. The excess paid in respect of the first year was Rs.40,000 and the second year Rs.15,000. In the third year the actual royalty amounted to Rs.47,500. In the fourth year Rs.35,000 (In consequence of strike which lasted for 73 days) and in the Fifth Year Rs.65,000 only. Write up Minimum Rent Account, Royalty Account, Short workings Account and Shyams Account in the ledger of Ram. Unit-IV 8. What is meant by Departmental Accounts? Discuss various problems arising during the preparation of Departmental Accounts. 9. Rishi Ltd. Send goods to its Kota Branch at Invoice Price which is fixed at a profit of 20% on sale price. From the following information prepare Branch Stock Account, Branch Adjustment Account and Branch Profit and Loss Account in the Books of Head Office. Opening stock at cost Branch expenses Goods sent to Branch Loss in Transit Pilferage Sales Stock at the end Rs.24,000 Rs.10,000 Rs.2,45,000 Rs.15,000 Rs.4,000 Rs.2,22,000 Rs.34,000

Claims from Insuarance Company against loss in transit

Rs.8,000

Unit-V 10.What is Instalment Payment System and how does it differ from Hire Purchase System? 11. Megha and Company maintains accounts on Self-balancing system on 31st March 2010. The general ledger discloses the following balances: Sales Ledger Adjustment Account Rs.20,000 (Dr.) Purchase Ledger Adjustment Account Rs.15,000 (Cr.) On scrutiny of ledgers the following errors were detected: (i) An overcast of Rs.200 in sales book (ii) A credit of Rs.4,280 for goods returned has been entered in the account of a customer in the sales ledger, no other entry was made. (iii) An item of Rs.840 in the returns outward book has been posted to the personal account at Rs.40. (iv) Discount amounting to Rs.300 received has not been posted to discount account in the general ledger. (v) A trade discount of Rs.200 has been debited to a suppliers account in the purchase ledger and posted direct to the credit of purchases account in the general ledger. (vi) Purchase book was undercast by Rs.500. (vii) Bills payable book was undercast by Rs.300. (viii) A cheque for Rs.1,000 received from Girish was wrongly posted to the accounts of Harish. Pass necessary journal entries to rectify the adjustment accounts in different ledgers. Also show the adjustment balance in two adjustment accounts in general ledger.

Section C 12. Sapna Ltd. furnishes the following balance sheets as at 31st March 2011. Liabilities Amount Assets Authorised capital, issued capital and Fixed Assets subscribed capital: Investments 12% Redeemable preference shares Current Assets, loans of Rs.100 each fully paid 75,00,000 And advances Equity shares of Rs.10 each fully paid 50,00,000 Reserve and Surplus:

Amount 1,50,00,000 1,20,00,000 2,95,00,000

Capital Reserve Revenue Reserves Current Liabilities and Provisions

50,00,000 2,50,00,000 1,40,00,000 5,65,00,000

5,65,00,000

The company purchased its own 1,00,000 equity shares of Rs.100 each at Rs.25 per share on 1.4.2011 out of free reserves. The company also redeemed preference shares on the same date. The payments for the above were made from Bank Account, which forms part of current assets. You are required to pass necessary journal entries to record the above and prepare the balance sheet as it would appear after the aforesaid transactions. 13. What is meant by profits prior to and post-incorporation? Explain the method of ascertaining them. How such profits and losses are dealt within company accounts? 14. Write short notes on the following: (i) Goods in Transit (ii) Inter Branch Transactions (iii) Cash in Transit (iv) Depreciation on Branch Fixed Assets. 15. X company purchases from Y company three trucks costing Rs.60,000 each on the hire purchase system. Payment to be made as Rs.36,000 down and remaining in three equal instalments together with interest @6% per annum. X company writes off depreciation @20% on the reducing balance. They paid the instalment due at the end of the first year but could not pay the next instalment. Y company agreed to leave one truck with the purchaser adjusting the value of the other two trucks against the amount due. The trucks were valued on the basis of 30% depreciation annually. Show necessary accounts in the books of both the parties for two years.