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I Semester B.Com. Examination, October/November 2A12
(Semester Scheme) (Prior to 2011-12 Batch)
COMMERCE
Financial Accounting - |

Time: 3 Hours Max.Marks: 90

Instruction: Answersshouldbe eitherin Kannadaor in English.

-A
SECTION
Eachquestion
Answeranyten of thefollowing. carries2 marks. (10x2=80)
1. a) Whatdo youmeanby Royalty?
b) Whatis entryfor irrecoverableshortworkings in the booksof lessor?
c) WhyisMinimum RentClause includedintheRoyalty Agreement ?
d) Cana sellersiezetheassetsunderinstalment system? Why?
e) Whatdo you meanby shortworkings ?
f) Mentiontwomethodsof calculating purchase consideration.
g) Writeanytwoobjectives of Amalgamation.
h) Giveanytwo reasonsforconversion of a firmin to a company.
i) Writeanytwodifferences betweenRealization A/candRevaluation A/c.
j) Statetwofeaturesof hirepurchasesystem.
k) Whatis an unrecorded asset?
l) Howdo youtreatan assetof an oldfirmnottakenoverby the newfirm?
_B
SECTION
Eachquestion
Answerany five of thefollowing. carries5 marks. (5x5=25)
2. Passincorporation entriesin the booksof the companyfrom the following
particulars.
Purchase consideration T 12,00,000
Valueof sundryassetstakenover t 14,00,000
Currentliabilities
takenoverby t 1,00,000
Settlementof purchase consideration90%in equitysharesoft 10eachandthe
balancein9o/"debentures oft 100each.
p.T.o.
'
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3. Calculate thecashpriceof an assetfromthefollowing downpayment, t 30,000
t' 1styearinstalment
{ 42,000 ,2ndyearinstatment t 39,000,3rdyearinstalment
' t 36,000,4thyear
instalment t 33,000,rateof interest
at 10%p.a.

4. Whatis theaccounting
procedure
involved
intheamalgamation
of firms?

5. calculate
theamountof interest
included
in eachinstalment
:

CashpriceT38,000, Downpaymentt10,000,
fourinstalment
ofT 10,OOO
cash
payableat the endof eachyear.

6. Distinguish
betweenhirepurchase purchase
andinstalment system.

7. Calculate
theamountof purchase
consideration
fromthefollowing
details.

Thepurchasing
companyagreedto issue60,000equitysharesoft 10eachat
t12.50pershare,3,0009% preference
shareof T100eachat par,g,0006%
debenturesof{100eachat a discount
of 10%andpaycashequalto 20"/"ofthe
totalpurchase
consideration.

B. Prepare
an analyticaltable
fromthefollowing
details.

Royaltypayable= t 5 perton of output

Minimumrent= t 80,000p.a-rightof recoupment -firstthree

of shortworking
years.

outputduringthe first3 years: 12,000tons,16,000tons, and24,000tons

respectively.

9. calculate
thevalueof eachinstalment
fromthefollowing
details:

Cashprice- T 6,00,000, downpaymen t 10%ofcashpricebalanceof cash

priceis payablein 3 equalannualinstalments
together
withinterest
at 10%on
theoutstanding
cashprice.
lllllilllllllllll$lffilflllll -s- os - s07
_C
SECTION
Answeranythreeofthefollowing. Eachquestioncarries15 marks. (3x15=45)
10. Patelpurchased a motorcarfromBangalore MotorsLtd.on 1stJan.2008on
system.Thepaymentis to be madeas follows.
instalment
t 50,000on delivery
< 2,32,500at the endof I year
t 1,60,000attheendof ll year
t 1,95,000at theendof lll year
< 1,72,500at theendof lV year
Depreciation
ischargedat20"/"p.a.lnterest
at 15"/"p.a.isincluded
ininstalments.
Preparenecessary LedgerAccountsinthe booksof Patel.
11. P purchased a machinecostingt4,80,000on 1-4-06fromBangalore Machines
Ltd.underHirePurchase System.Thetermsbeing: t 1,20,000 downandthe
balancein 3 equalannualinstalmentstogether
withinterestat2O"/"p.a.onthe
outstandingcashprice.Depreciation
isto bechargedat 15p.aunderDiminishing
BalanceMethod.
Preparenecessary ledgeraccountsinthebooksof 'P'till31-3-09.
12.A andB werein partnership
sharingprofitsandlossesinthe ratioof 3 : 2. The
following
wasthe BiSof thefirmas on 31-3-08.
Liabilities T Assets t
Creditors 52,000 Cash 24,OOO
A's loan 8,000 Debtors 60,000
Capital: Stock 76,000
A 1,20,000 Fixedassets 80,000
B 60,000
2,40,000 2,40,000
C Co. Ltd,agreedto take overfixedassetsand stockfor a consideration of
{ 1,60,000 whichis to be satisfied
a) by paymentofcashT 32,000
b) byallotmentof 480,B/"preference sharesofT 100each
c) byallotmentof 6,400equitysharesoft 10eachvaluedatt 12.50pershare.
Thedebtorsrealised T56,000andthecreditors werepaidt 48,000infullsettlement
.
It wasagreedbetweenthe partnersas follows:
l) Equitysharesareto be allottedintheirprofitsharingratio.
ll) Preference
sharesareto be allottedto A to thevalueof hisLoanA/candthe
pref. sharesto be allotted
remaining to partners
equally.
Preparenecessary LedgerAccountsin the booksof A & B,
os - 307 |il]ililililtIil
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13. On 1-1-2001 X Co.Ltd.tooka leasefroma landlordon a royaltyoft 2pertonof
coalraisedwitha minimumrentofT40,000andpowertorecoupshortworkings
duringthefirstfouryearsof thelease.
Theannualoutputwasasfollows:
2W1 10,000tons
2002 16,000tons
2003 20,000tons
2W4 30,000tons
2005 40,000tons
PassnecessaryJournalentriesin the booksof X Co. Ltd.
14. The followingare the B/sheetsof M/s A and B and M/s C and D as on
31-3-2010 on whichdatetheydecidedto AmalgamatetheirBusiness.
Liabilities A&B C& D Assets A&B C&D
Capitals
A 80,000 Machinery 96,000 40,000
B 40,000 Furniture 4B,OO0 12,000
C 60,000 Investments 16,000
D 60,000 Stock 32,000 60,m0
Reserves 24,000 Debtors 64,000 28,OOO
Creditors 56,000 32,000 Cash 4,000 12,OOO
2,00,000 1,52,000 2,00,000 1,52,000
A andB weresharingprofitsandlossesinthe ratioof 3 : 2 andC andD equally.
Thetermsof amalgamation wereas follows:
a) Thenewfirmwasto takeoveralltheassetsandliabilities of boththefirms.
b) Theassetsof A and B werevaluedas follows:
Machinery{ 40,ooo,stock t 24,ooo,DebtorsT 60,000furnitureand
investments
at bookvaluesandgoodwillt20,000.
c) Theassetsof C and D werevaluedas follows:
Machineryt 48,000,furniture
t 18,000,stockt 56,000,Drs.T 26,000and
Goodwillt24,000.
closethe booksof M/sA andB andM/sC & D andprepareamalgamated
balancesheetof newfirm.
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