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Business Accounting and Analysis (Semester I) q1xAKCGPn2

The document is a practice exam for a Business Accounting and Analysis course. It contains 5 questions: 1) Prepare financial statements from a trial balance. 2) Calculate machinery and depreciation accounts over two years. 3) Prepare common size balance sheets for two companies and interpret. 4) Prepare a stores ledger using weighted average method. 5) Explain accounting treatments for a potential lawsuit settlement and calculation of cost of goods sold, identifying principles.

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111 views3 pages

Business Accounting and Analysis (Semester I) q1xAKCGPn2

The document is a practice exam for a Business Accounting and Analysis course. It contains 5 questions: 1) Prepare financial statements from a trial balance. 2) Calculate machinery and depreciation accounts over two years. 3) Prepare common size balance sheets for two companies and interpret. 4) Prepare a stores ledger using weighted average method. 5) Explain accounting treatments for a potential lawsuit settlement and calculation of cost of goods sold, identifying principles.

Uploaded by

Priyanka
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 3

SVKM’S NMIMS

Anil Surendra Modi School of Commerce

Batch: 2020-2023
Academic year 2020-21

Programme: B.Sc. Finance Duration: 2 Hours


Subject: Business Accounting & Analysis (Semester I) Marks: 50

Instructions:
 All Questions are compulsory.
 Working notes must form an integral part of your answer.
 Numbers to the right indicate the maximum marks for each question.
 Simple and scientific calculators are allowed
 Make necessary assumptions wherever required

Q 1) (20 marks)

From the following trial balance of Treasure Island Limited, you are required to prepare Balance
Sheet as on 31.3.2020, Statement of Profit and Loss and relevant notes to accounts for the year
ended 31.3.2020 as per Schedule III of Companies Act 2013.

Particulars Debit (Rs.) Credit (Rs.)


Land 250,000  
Property Plant and Equipment 760,000  
Trade Receivables 95,000  
Closing Inventory 90,000  
Cash and cash Equivalents 70,000  
Adjusted Purchases 330,000  
Administrative Expenses 65,000  
Advertisement Expenses 50,000  
Miscellaneous Expenses 40,000  
HDFC Loan Interest 25,000  
Interim Dividend Paid 25,000  
Capital Work in Progress 500,000  
Equity Capital (Face Value of Rs. 10 each)   300,000
HDFC Loan   250,000
General Reserve   100,000
Profit & Loss A/c (Opening Balance)   80,000
Securities Premium   42,000
Sales   800,000
Trade Payables   563,000
Accumulated Depreciation   165,000
     
  2,300,000 2,300,000

Additional Information:
(i) The authorised share capital of the company is 50,000 shares of Rs. 10 each.
(ii) Proposed a final dividend @ 50%.

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(iii) Depreciation is to be provided on Property Plant and Equipment at 20% on cost.
(iv) HDFC Loan was used for Capital Work in Progress. Asset will be taking substantial time to get
ready for its intended use
(v) Trade receivable outstanding for period exceeding 6 months is Rs. 35000.Create a provision for
doubtful debt @ 50% on trade receivable outstanding for more than 6 months and @ 10% on
remaining trade receivables.
(vi) Create a provision for income tax @ 30%.

Q2) (10 Marks)

On 1st April, 2018, a firm purchased Machinery for ₹ 9,00,000. On 1 st January, 2019, additional
Machinery costing ₹ 5,00,000 was purchased. On 1 st October, 2019, the first machinery purchased,
having been damaged, was sold off for ₹ 3,00,000. A new Machinery costing ₹ 10,00,000 was
imported on 1st December, 2019. Firm also paid import duty amounting to ₹ 1,00,000 on 1 st
December, 2019 and incurred a cost of ₹ 20,000 on its test-run on 31 st December, 2019. The
machine finally got ready for use on 1 st January, 2020.

The firm maintains Provision for Depreciation Account and provides depreciation on its machinery
@15% p.a. as per Written Down Value method.

Show Machinery Account and Provision for Depreciation Account for the period of two years ending
31st March, 2020. (Round off the decimals to nearest rupee)

Q3) (10 Marks)

Prepare common size balance sheets of R Ltd & P Ltd as on 31 st March 2020 from the following
balance sheets of the two companies & give your interpretation.

Liabilities R Ltd P Ltd Assets R Ltd P Ltd


Equity share capital 3,30,000 5,80,000 Factory building 2,00,000 1,20,000
11% Debentures 3,08,000   Machinery 2,40,000 5,42,000
Profit & loss A/c 6,000 64,800 Stock 2,04,000 1,87,200
Unclaimed dividend 67,200 93,600 Sundry debtors 1,80,000 2,59,200
Sundry creditors 87,200 2,27,200 Bank 37,600 68,400
Other current liability   1,20,000 Current Investments 43,200  
Outstanding salary 39,200 14,400
Provision for taxation 67,200 76,800      
     
           
           
904,80 1,176,80 904,80 1,176,80
Total ₹ Total ₹
0 0 0 0

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Q4) (5 Marks)

Prepare a Stores ledger on the basis of the following information for the month of April 2020, using
Weighted Average Method and calculate value of closing inventory.

1 April Purchased 100 units @ Rs. 10.00 each


2 April Purchased 300 units @ Rs. 11 each
5 April Issued 200 units to job A
7 April Purchased 250 units @ Rs. 12 each
10 April Purchased 200 units @ Rs. 12.5 each
13 April Issued 400 units to job B
20 April Purchased 100 units @ Rs. 12.00 each
25 April Return of excess from job B 20 units
(Round off rates upto two decimal points and round off values to nearest rupee with zero decimals)

Q5) (5 Marks)

a) Curewell Pharmaceutical Limited is facing a law suit wherein it may be liable to pay a fine of
Rs.10 million. The lawyer of the company has advised that there is a high probability of the
company losing the law suit. How should the company record this transaction in the books
of accounts? Which accounting principle is involved and explain the same in brief? (2 marks)

b) Alpha Traders had goods worth Rs. 2,00,000 in stock which were bought during the previous
year. During the year, goods worth Rs. 13,50,000 were purchased. Closing Stock with the
firm is Rs. 4,50,000. Remaining goods have been sold during the year for Rs. 14,00,000.
Ascertain the cost of goods sold during the year and profit or loss for the year. Identify &
explain the accounting principle involved. (3 marks)

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