B.com Part 2 – ADVANCED AND COST ACCOUNTING 2008 (Private)

by • 01/09/2012 • GeneralComments (0)421

ADVANCED AND COST ACCOUNTING 2008 (Private)

 

Time : 3 Hours                Max. Marks:100

 

Instructions: Attempt FIVE questions, THREE from Section-I and TWO from Section-II.

 

SECTION “A” (Advanced Accounting) 60 Marks

 

1. ACCOUNTING FOR COMPANIES, FINANCIAL. STATEMENTS

Star Co. Ltd. Was regIstered with Capital of Rs.8,00,000 divided into shares of Rs.10 each. The following are the account balances of the company as on June 30, 207:

 

DEBIT BALANCES:

Cash Rs,11000, All for B/D Rs.1,000, Marketable Securities Rs.6,000, Accounts Receivable Rs.22,000, Merchandise Inventory Rs.10,000, Machine cost Rs.55,000, Purchases Rs.3,25,000, Sales returns & Allowances Rs.3,000. Office Salaries Expense Rs.13,000, Sales Salaries Expense Rs. 15,000, Advertising Expense Rs.8000, Office Rent Expense Rs.24,000, Auditors Fees Rs.5,000, Directors

Fee Rs.14,000, Discount Shares Rs.10,000.

CREDIT BALANCES:

Accounts payable Rs.6,000, Debentures Payable Rs.5,000, shares Capital Rs.1,10,000, Sales Rs,4,00,000, Retained Earnings?

 

DATA FOR ADJUSTMENT ON JUNE 30, 2007:

1) Merchandise Inventory valued at Rs.58,000

2) Estimated Allowances for Bad Debts Rs.1,300

3) Depreciation Expense for the year Rs.9,000

4) Prepaid Rent Rs. 4000

5) Declared cash Dividend Rs.4,000 & Stock dividend Rs.1,000

 

REQUIRED: Prepare:

(i) An Income Statement for the year ended Juno 30, 2007

(ii) Statement of retained Earnings

(iii) A Balance Sheet as of June 30, 2007 in a classified form

 

2. AMALGAMATlON

Hafeez Co. Ltd. and Rasheed Co. Ltd. decided to amalgamate their business and a new company Hameed Co. Ltd. was formed to take over all assets and liabilities of the two Companies. Hameed Co. Ltd. Issued 1,00,000 shares of Rs.10 each at Rs.26 to Hafeez Co. Ltd. And 98,000 shares of Rs.10 each at Rs.26 to Rasheed Co. Ltd. At the time of amalgamation following were the Balance Sheets of the two companies.

 

HAFEEZ CO. LTD.,

Balance Sheet as on Dec. 31, 2007

Assets

Equities

Cash  1,10,000 Account Payable 2,80,000
Account Receivable 4,00,000 Share Capital:
Merchandise Inventory 6,00,000 190,000 shares of Rs.10 19,00,000
Building 13,00,000 General Reserves 3,00,000
Furniture 70,000
Total 24,80,000 Total 24,80,000

 

RASHEED CO. LTD.,

Balance Sheet as on Dec. 31, 2007

Assets Equities
Cash  200,000 Account Payable 2,00,000
Account Receivable 3,50,000 Share Capital:
Merchandise Inventory 6,00,000 185,000 shares of Rs.10 18,50,,000
Building 9,00,000 General Reserves 1,00,000
Furniture 100,000
Total 21,50,000 Total 21,50,000

 

 

REQUIRED

(i) Compute purchase consideration for each of the amalgamating company.

(ii) Give all necessary entries in the general journal of Hameed Co. Ltd.

(iii) Prepare a Balance sheet for Hameed Co. Ltd. after amalgamation.

 

3. ACCOUNTING FOR INSTALLMENT SALES:

Rehan Co. Ltd. reports profits on installment basis. It uses perpetual inventory system, for recording merchandise. The transaction for the year ended Dec 31, 2007 are as under:

 

(i) Purchased merchandise on account for Rs.3,60,000

(ii) Sales on installment basis Rs.4,501000

(iii) Cost of installment sales Rs.2,50,000

(iv) Collection of installment Account Receivable Rs.3,00,000

(v) Payment of Accounts Payable Rs.1 ,55,000

(vi) Repossession of goods sold on installment basis:

Installment Account cancelled Rs.22,000

Repossession of goods valued Rs.1 1,000

(vii) Expenses incurred but not paid Rs.8,000

 

REQIURED:

Give entries in general journal to record the above transactions including adjusting and closing entries.

 

 

4. HEAD OFFICE AND BRANCH ACCOUNTING:

Following are the transactions entered into by Zafar Co. Ltd. with its branch atHyderabadduring the year ended June 30, 2007. The head Office billed merchandise to Branch at 25% above cost:

 

(i) Shipped to the branch merchandise billed at Rs.701000

(ii) The branch returned merchandise at billed price of Rs.1,500

(iii) At June 30, the branch inventory was valued at billed price o Rs.3,000

(iv) The branch reported a loss of Rs.4500 for the year.

 

REQUIRED:

[ad#banner]

(i) Give journal entries on the books of Head Office to record above transactions

(ii) Calculate and record the profit it from Allowance for overvaluation.

 

5. FINANCIAL STATEMENT ANALYSIS:

The selected data given below are taken from the record of the Hasan Co. Ltd. at the end of the year 2007:

 

Cash 30,000 Account Receivable Beginning 4,150
Prepaid insurance 12,500 Account Receivable Ending 43,500
Inventory (Beginning) 18,150 Sales 2,55,000
Invcentory (Ending) 32,500 Operating Expenses 52,300
Purchases 120,000 Account Payable 22,500
Share Capital (per value Rs.10) 2,50,000 Accrued Expenses 32,500
Retained Earning 30,000

 

REQUIRED:

Determine following ratios on the basis of above information:

(i) Working Capital (ii) Acid Test Ratio

(iii) Current Ratio (iv) Operating Expense Ratio

(v) Rates of Gross Profit on Sales (vi) Equity Ratio

(vii) Account receivable Turnover Rate

(viii) Inventory Turnover Rate

 

 

SECTION “B” (Cost Accounting) 40 MARKS

 

6. ACCOUNTING FOR MANUFACTURING CONCERNS:

Moon Co. has provided following for the year ended December31, 2007:

 

Sales 6,55,000

Advertising Expense 65,000

Direct Labour cost incurred 1,48,000

Direct Material Purchased 2,25,000

Building rent: 60% allocated to manufacturing and 30% to administrative & selling functions

Utilities — factory 50,000

Maintenance — factory 32,0000

Selling and administrative salaries 95,000

FOH applied at the rate of 90% of direct labour

 

                                        Jan 1,2007  ———- Dec 31. 2007

1. Material                       Rs.21,000  ———-   Rs.10,000

2. Work in process           Rs.28,000  ———-  Rs.42000

3. Finished Goods            Rs.42,000  ———-   RS. 45,000

 

REQUIRED:

(i) Prepare a statement Cost of goods Manufactured for the year ended Dec 31, 2007.

(ii) Prepare an income statement.

7. JOB ORDER COSTING

 

Skyline Co. uses Job order cost System. The manufacturing operating for the year ended December 31, 2007 were as follows:

(i)                  Purchases raw material on account Rs.72,000.

(ii)                Materials issued to factory of Rs.64,500 of which Rs.4,500 was indirect materials.

(iii)               Direct labour cost incurred Rs.58,000 and Rs.4,800 indirect labour.

(iv)              Factory overhead application rate was 80% on Direct Labour.

(v)                Factory overhead cost incurred on account Rs.35,000.

(vi)              Cost of job completed Rs.1,50,000.

(vii)             Cost of jobs Rs.1,30,000.

(viii)           Sales on account Rs.1,70,000

 

REQUIRED:

Record all the above transactions in the general journal and give an entry to close the factory overhead account.

 

8. STANDARD COSTING:

Irfan Co. provided following standard and actual cost data for the month of June, 2007.

 

Standards

Materials 500 Kgs @ Rs.1.50

Labour 500 Hours @ Rs.3.50

Factory overhead Rs.2.70 per labour hour

 

Actual

Materials 490 Kgs @ Rs.1.80

Labour 510 Hours @ Rs.3.60

Factory overheads Rs.1,480

 

 

REQUIRED

(i)                  Compute material Price variance, material quantity variance, Labour rate variance, Labour efficiency variance and Overhead variance.

(ii)                General Journal entried to close the variance account.

Pin It

Leave a Reply