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C 22021 (Pages : 4) Name......................................

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Reg. No..................................

SECOND SEMESTER (CBCSS-UG) DEGREE EXAMINATION, APRIL 2022

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B.Com.
BCM 2B 02—FINANCIAL ACCOUNTING
(2021 Admissions)
Time : Two Hours and a Half Maximum Marks : 80

Section A
Answer any ten questions.
Each question carries 3 marks.

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All questions can be attended.
Overall Ceiling 30.
1. What is reserve capital ?

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2. List any four IFRS.
3. Explain under subscription.

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4. What is double entry system of accounting ?
5. Expand SOPL and SOFP.
6. What do you understand by reissue of forfeited shares ?

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7. What is a cumulative preference share ?
8. What is a debenture ?
9. What is fraction shares ?
10. What do you mean by principle of objectivity ?
11. What is allotment of shares ?
12. State the objectives of Ind-AS.
13. What are current liabilities ?
14. What do you mean by financial reporting ?

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15. Define accounting standards.
(10 × 3 = 30 marks)
Section B

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Answer any five questions.
Each question carries 6 marks.

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All questions can be attended.
Overall Ceiling 30.
16. Explain the different types of debentures.

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17. Distinguish single-entry and double-entry system of accounting.
18. What are the objectives of accoutning standards ?
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19. From the following data, ascertain total sales :—

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`
Balance of debtors on 01-01-2020 … 24,000
Sales returns … 10,000

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Cash received from customers … 90,000
Discount allowed to them … 6,000
Bills receivable received … 34,000
Bad debts … 3,000
Bills receivable dishonoured … 7,000
Balance of debtors on 31-12-2020 … 20,000
Cash sales … 50,000

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20. Arjun Ltd. issues 1,00,000 equity shares of Rs. 10 each at a premium of 20 % payable as
Rs. 2 on application, Rs. 7 on allotment (including premium) and Rs. 3 on first and final
call. The company received applications for 2,85,000 shares. It deals with them in the
following manner :

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(a) Applicationts for 25,000 shares receives the full allotment.
(b) The applicants for 2,25,000 shares receive one share for every three shares applied
for.

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(c) It rejects the applications for 35,000 shares.
The company duly receives the entire amount. Pass necessary journal entries.

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21. Vivek Ltd. took over assets worth Rs. 5,00,000 and liabilities of Rs. 1,34,000 of Midhun
Traders for the purchase consideration of Rs. 3,96,000. Vivek Ltd. paid the purchase
considerion by issuing debentures of Rs. 100 each. Give journal entries in the books of
Vivek Ltd. assuming that debentures are issued at 10 % premium.
22. AB Ltd. issued 5,000 shares of Rs. 10 each at par, payable Rs. 3 on application. Rs. 2 on
allotment, Rs. 3 on first call and Rs. 2 on final call. Mrs. Smitha was allotted 50 shares.
Give the necessary journal entries relating to the forfeiture of shares in the following
alternative cases.
Case 1 : If Smitha failed to pay the allotment money and her shares were forfeited.

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Case 2 : If Smitha failed to pay allotment money and on her subsequent failure to pay
the first call, her shares were forfeited.
Case 3 : If Smitha failed to pay the first call and on her subsequent failure to pay the

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final call, her shares were forfeited.
23. A company carried forward a balance of Rs.40,000 from the P & L A/c for the year ended
31-03-2019. During the year 2019-20 it made a further profit of Rs. 3,10,000 before providing

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taxation. It was decided that the following decisions may be carried out :
(a) Provision for taxation Rs. 1,50,000.
(b) Dividend equalisation reserve Rs. 25,000.

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(c) Dividend on 8 % preference shares of Rs. 2,00,000.

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(d) Dividend at 15 % on 30,000 equity shares of Rs. 10 each fully paid.

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(e) General expenses Rs. 35,000.
(f) Development rebate reserve Rs 35,000.

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Show journal entries.
(5 × 6 = 30 marks)
Section C
Answer any two questions.
Each question carries 10 marks.
24. From the following details, you are required to ascertain profit or loss made by a trader
during the year ended 31-12-2020 and to prepare the statement of affairs as on that date :

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Particulars 31-12-2019 31-12-2020
Cash in hand … 700 850
Cash at bank … 2,500 3,000

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Stock in trade … 25,000 30,000
Sundry debtors … 30,000 40,000
Sundry creditors … 15,000 12,000

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Plant and Machinery … 80,000 1,00,000
Furniture … 30,000 25,000
During the year the trader has withdrawn Rs. 2,000 per month to meet his family obligations.

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Depreciate machinery at 10 % and furniture at 5 %. As regards debtors Rs. 1,000 are
irrecoverable and a provision of 2 % is to be created.
25. A company issued 10,000 equity shares of Rs. 10 each at a premium of Rs. 3 per share,
payable Rs. 4 on application, Rs. 5 on allotment (including premium) and Rs. 4 on first and
final call. Subscriptions were received for 13,000 shares. The excess money was refunded
and the allotment money was received in full.
The first and final call was made in due course and the amount due was received with the
exception of 100 shares. These shares were forfeited and subsequently re-issued as fully

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paid for a consideration of Rs. 8 per share.
Show journal entries recording the above transactions.
26. Malabar Manufacturing Company was registered with an authorised capital of Rs. 10,00,000

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divided into shares of Rs. 10 each, of which 40,000 shares had been issued and fully paid.
The following is the trial balance on 31-03-2019 :
Particulars Debit Credit

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Stock (01-04-2018) … 1,86,420
Returns … 12,640 9,810
Manufacturing expenses … 19,240

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18 % Bank loan (secured) … 50,000

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Office salaries … 13,000

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Director’s remuneration … 12,000
Freehold premises … 1,64,210
Furniture … 5,000

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Debtors and Creditors … 1,64,400 92,200
Cash at bank … 1,06,860
Profit and Loss A/c (01-04-2018) … 8,640
Share capital … 4,00,000
Purchases and Sales … 7,18,210 11,69,900
Wages … 1,09,740
Carriage inward … 4,910

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Interest on bank loan … 4,500
Audit fees … 1,250
Preliminary expenses … 6,000

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Machinery … 1,28,400
Loose tools … 12,500
Cash in hand … 1,920

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Advance payment of tax … 14,290
Commission … 8,640
Transfer fee … 40

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Rates and electricity … 17,610
Repairs … 8,610
Carriage outward … 9,260
Calls in arrears … 1,000
Prepare final accounts for the year ended 31-03-2019 after considering the following :—
(a) On 31-03-2019, outstanding wages and salaries stood at Rs. 1,890 and Rs. 1,200
respectively. On the same date, stock was valued at Rs. 1,24,840 and loose tools at
Rs. 10,000.

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(b) Provide interest on bank loan for 6 months.
(c) Depreciate machinery by 15 % and furniture by 10 %.
(d) Write off one-third of preliminary expenses.

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(e) Make a provision for income tax at 50 %.
(f) Provide Rs. 8,500 on debtors for doubtful debts.

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(g) Provide further Rs. 3,120 for discount on debtors.
(h) The directors recommended a dividend at 15 % for the year ending 31-03-2019
after a transfer of 5 % on net profit to general reserve.

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27. What are accounting standards ? Explain the need and importance of global accouting
standards.
(2 × 10 = 20 marks)

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