B.com Part 2 – ADVANCED ACCOUNTING 2005 (Private)

by • 01/09/2012 • GeneralComments (0)334

ADVANCED ACCOUNTING 2005 (Private)

 

Time : 3 Hours                Max. Marks:100

 

Instructions: Attempt any FIVE questions.

1. FINANCIAL STATEMENT

HAMMAD HAMID LTD. Was registered with an authorized capital of Rs.70,00,000 divided into 7,00,000 Ordinary Shares Rs.10 each. The company books showed the following balances on June 30, 2005.

 

Debit Balance Credit balances
Cash 110,000 Paid up Capital 500,000
Receivable 125,000 Retained Earning 50,000
Merchandise Inv. 42,000 Accounts Payable 50,000
Office Supplies 36,000 6% Debentures Payable 100,000
Unexpired insurance 40,000 Accumulated Dep. (Plant Assets) 50,000
Plant Assets 450,000 Accumulated Dep. Vehicles 75,000
Purchases 205,000 Purchases return & All. 30,000
Transportation in 35,000 Commission Income 90,000
Sales Return & Allow. 25,000 Sales revenue 400,000
Salaries expense  75,000
Vehicles 200,000
Total Rs.1345,000 Total Rs.1345,000

Data for adjustment on June 30.2005.

(i) Office Supplies Used Rs.24,000

(ii) Insurance Expired Rs.33,000

(iii) 20% Depreciation for the year on written down value on Vehicles.

(iv) Depreciation estimated on plant Assets Rs.50,000.

(v) Salaries for ‘he period Rs.80,000.

(vi) Prepaid Salaries Rs.5,000

(vii) Merchandise Inventory Rs32,000 on 30.6.2005.

(viii) Provision for estimated bad debts Rs.5,00

(ix) Appropriate Rs.40,000 for plant Extension and Rs.25,000 for General Reserves and Declare Cash dividend @ 10% on paid-up Capital.

 

REQUIRED:

(i) INCOME STATEMENT

(ii) STATEMENT OF RETAINED EARNING.

(iii) BALANCE SHEET

 

2. ACCOUNTING FOR INSTALLMENT SALES:

 

UMAR & SONS LTD. use perpetual Inventory System for recording merchandise and Installment method for recognizing profit their transactions for the year ended June 30,2005 were as under:

 

(i) Sales on installment basis Rs.4,50,000

(ii) Cost of Installment Sales 3,15,000

(iii) Purchased merchandise on account for 5,00,000

(iv) Collection of installments 1,50,000

(v) Payment 01 Accounts payable 2,00,000

(vi) Expenses paid 4,000

— Installment Accounts cancelled 25,000

— Repossessed merchandise was valued 16,000

 

REQUIRED:

Record the above transactions In GENERAL JOURNAL giving adjusting and closing entries.

 

3. ACCOUNTING FOR BRANCH:

 

On January 1, 2005 PRINTLAKE CO. opened a branch atQuetta. Following is the information for the month of January 2005.

The Head Office has followed the practice of billing the Branch at 25% above cost.

 

(i) Goods supplied to Branch at billed price Rs.40,000

(ii) During the month additional shipment was made at billed Price of Rs.4,800

(iii) Goods returned by branch at billed price of Rs.4,000

(iv) Cash remitted to branch Rs.5,000

(v) Branch purchased locally Rs.8,000

(vi) Sales by branch Rs.50,000

(vii) Branch incurred operating expenses Rs.6,000

(ix) Merchandise valued at Branch on January 31, 2005 Rs.15,000 including 10% of local purchases.

 

 

REQUIRED:

Give the journal entries in the books of Head Office and Branch office to record the above transactions and to record over valuation and closing entries.

 

4. COMPANY ACCOUNTING – Absorption:

The balance sheet data of Saim Waqar Ltd. Was as under:

Authorized Capital Rs.1250,000

Paid up Capital 500,000

Shares Premium Rs.62,500

Retained Earning 125,000

Reserves Rs.62,500

Bonds payable 125,000

Accounts payable Rs.75,000

Preliminary Expenses 125,000

 

Saim Waqar Ltd. Was absorbed by Owais Ltd. On the following terms:

 

(a) All the Assets and Accounts payable were taken over by absorbing Company at book value.

(b) Saim Waqar Ltd. Received 50,000 shares of Rs10 each and cash payment of Rs.75,000 from Absorbing Company.

(c) Bond holders received 13750 shares of Rs.10 each from the Absorbing Company.

(d) Owais Ltd. Paid the Liquidation Expenses of Rs,12,500 to Saim Waqar Ltd.

to purchase consideration.

 

REQUIRED:

(i) Compute the purchase consideration.

(ii) Give the necessary journal entries to give effect to the above decision on the books of

(1) SAIM WAQAR LTD.

(2) OWAIS LTD.

 

OR

 

ACCOUNTING FOR COMPANY – AMALGAMATION:

On January 1,2005 Balance Sheet of Karim Ltd. And Raheem Ltd. appeared as follows:

ASSETS

 

Assets

Karim Ltd.

Rahim Ltd.

Cash 32,000 16,000
Accounts Receivable 24,000 48,000
Merchandise 56,000 24,000
Prepaid Insurance 8,000 ——–
Plant Assets 120,000 144,000
EQUITIES:
Account Payable 40,000 24,000
Accumulated Depreciation 40,000 48,000
Shares Capital (Rs.10 each) 160,000 160,000

 

 

The two Companies amalgamate on January 12005 to form BRIGHT STAR LTD. On the Following conditions:

 

(i) Authorized Capital of BRIGHT STAR LTD. is to be 80,000 ordinary shares of Rs.10 each.

(ii) All the assets and liabilities of Karim Ltd. are taken at book value and shareholders are issued 24,000 shares (fully paid up) m BRIGHT STAR LTD.

(iii) All the assets and liabilities of Rahim Ltd. are taken over at book value and the shareholders are issued 19200 shares (fully paid up) in BRIGHT STAR LTD.

(iv) Preliminary Expenses paid by new Company Rs.8,000

 

REQUIRED:

(i) General Journal entries m the books of BRIGHT STAR LTD.

(ii) Balance Sheet of BRIGHT STAR LTD. On January 1,2005

 

5. ANALYSIS OF FINANCIAL STATEMENT

Following are the selected data taken from the books of MASOOMA & Co. at the end of year. 2004.

 

Cash 22,400
Marketable Securities 7,700
Inventory at Start. 29,600
Inventory at End 25,800
Prepaid Expenses 19,200
Accounts Receivable Beginning 59,700
Accounts Receivable Ending 49,400
Accounts Payable 36,600
Notes Payable 21,400
Purchases 246,200
Sales 384,000
Sales Discount 14,000
Operating Expenses 80,000
Non operating expenses 4,000

 

REQUIRED:

Compute the followings:

(a) Equity Ratio

(b) Current Ratio.

(c) Rate of Gross profit on Sales.

(d) Quick Ratio

(e) Rate of net income on Sales.

(f) Return on Assets.

(g) Return on Equity.

(h) Total days of operating cycle.

 

6. CASH & FUND FLOW ANALYSIS:

The comparative Balance Sheet of Uzair & Company for the two years are shown below:

 

Debit balances (In Rs.)         Dec.31, 2004                Dec.31 ,2003
Cash 56,000 25,000
Accounts Receivable 120,000 75,000
Inventories 65,000 40,000
Marketable Securities 30,000 38,800
Supplies 2,000 1,200
Building 200,000 140,000
Good will 20,000 25,000
Total Rs. 493,000 345,000
Credit balances (in Rs.)
Accumulated Dep. (Building) 48,000 35,000
Accounts Payable 62,000 45,000
Long term loan payable 50,000 ———
Share Capital 250,000 200,000
Retained Earning 83,000 65,000
Total Rs. 493,000 345,000

 

During the year 2004 the Company declared Cash Dividend of Rs.20,000 and Stock Dividend of Rs.35,000

REQUIRED:

(1) Compute working capital for both the year.

(2) Cash flow statement.

 

7. ACCOUNTING FOR INCOMPLETE RECORDS:

NOT INCLUDED IN THE NEW COURSE

  Begin with a quotation or why not try these out familiar saying

Pin It

Related Posts

Leave a Reply