BACHELOR'S DEGREE PROGRAMME. Term-End Examination December, 2015 ELECTIVE COURSE : COMMERCE ECO-14 : ACCOUNTANCY-II

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1 No. of Printed Pages : 11 I ECO-14 ce) cd BACHELOR'S DEGREE PROGRAMME Term-End Examination December, 2015 ELECTIVE COURSE : COMMERCE ECO-14 : ACCOUNTANCY-II Time : 2 hours Maximum Marks : 50 Weightage : 70% Note : Attempt any four questions including question no. 1 which is compulsory. 1. Attempt any two of the following questions : (a) What is Revaluation Account? Differentiate between Revaluation Account and Realisation Account. (b) What do you mean by Pro rata allotment of shares? Explain the provisions of Section 79 of the Companies Act regarding issue of shares at discount. (c) Explain the utility and significance of ratio analysis. (d) Distinguish between Hire Purchase System and Instalment System. 7, 7 2. What is cash flow statement? List the various sources and uses of cash. Also state as to how does it differ from fund flow statement? 4, 4, 4 ECO-14 1 P.T.O.

2 3. The Balance Sheet of P Ltd. as at 31st March is given as below : Liabilities Z Assets Z (in lakhs) (in lalfb,,,) Issued and paid-up Freehold Property 200 Share Capital: 20 lakh Equity Stock-in-trade 120 Shares of Z 10 each 200 Sundry Debtors 100 Profit and Loss A/c 180 Cash at Bank % Debentures 120 Sundry Creditors It was resolved in the Annual General Meeting : (a) (b) (c) to pay a dividend of 10% and corporate dividend 121/2%. to issue one bonus share for every four shares held. to give existing shareholders the option to buy one for every four shares held prior to the bonus distribution. (d) to repay the debentures at a premium of 4%. All the shareholders took up the option in (c) above. Pass journal entries and draw up the Balance Sheet after the above transactions have been given effect to. (Ignore tax on income.) ECO-14 2

3 4. (a) Describe the accounting treatment of debentures issued as a collateral security by the company. (b) Shashi Ltd. issued 8,000 15% Debentures of Z 100 each. Assuming that all the debentures issued are taken up and paid for, pass the Journal Entries in the books of the company in each of the following cases : (i) The debentures are issued at Z 90 each. (ii) The debentures are issued at a premium of 10%. (iii) The debentures are issued to a supplier of furniture amounting to Z 8,50,000. (iv) The debentures are issued at a discount of 5%, are repayable at a premium of 4%. 4, 8 5. Atkinson and Datta sharing profits in proportion of three-fourths and one-fourth showed the following as their Balance Sheet on 31st March, Liabilities Z Assets Z Creditors 37,500 Cash at Bank 22,500 General Reserve 8,000 Bills Receivable 13,000 Capital Accounts : Debtors 16,000 Z Stock 40,000 Atkinson 60,000 Office Furniture 11,000 Datta 32,000 92,000 Land and Building 35,000 1,37,500 1,37,500 They admit Gibson into partnership on 1st April, 2013 on the following terms : (a) That Gibson pays Z 30,000 as his capital for a fifth share in the future profits. 12 ECO-14 3 P.T.O.

4 (b) That a Goodwill Account be raised in the books of the new firm at a value of Z 40,000. (c) That Stock and Furniture be reduced by 10% and a 5% Provision for Doubtful Debts be created on Debtors. (d) (e) That the value of Land and Building be appreciated by 20%. That the capital Accounts of the partners be re-adjusted on the basis of their profit-sharing arrangement and any additional amount be debited or credited to their Current Accounts. Set out the journal entries and prepare necessary accounts. 6. Pagare Ltd. has a branch at Indore where goods 12 are sold for cash as well as on credit. The branch meets its expenses out of cash collected from its debtors and cash sales and remits the balance of cash to head office. On 31st March, 2012 the assets at the branch were as follows : Stock Z 11,5,000 Debtors Z 28,000 Furniture Z 45,000 During the year ended 31St March, 2013 the following transactions took place at the branch : ECO-14 4

5 Cost of goods received from head office Sales : Z Cash 7,11,400 8,50,000 Credit 2,75,100 9,86,500 Cash collected from debtors 2,59,700 4,400 Cash discount allowed to debtors Bad debts written off 3,600 Goods returned by debtors to branch Cost of goods sent back by branch to head office Expenses paid : Salaries 60,000 Rent and Rates 24,000 5,000 14,000 Petty Expenses 3,000 87,000 Furniture purchased by branch on 1St October, 2012 Payment made by head office by cheque 20,000 On 31st March 2013 stock at branch was valued at 1,47,000. Furniture is subject to 10% per annum. Prepare Branch A/c and Memorandum Branch Debtors A/c in head office for the year ECO-14 5 P.T.O.

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