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Your Roll No...

Sr. No. of Question Paper : 8S1

241208I|03
Unique Paper Code
Name of the Paper Financial Accounting
Name of the Course B.Com. (H)

Semester I- DSC
Maximum Marks : 90
Duration : 3 Hours

Instructions for Candidates

1. Write your RollNo. on the top immediately on receipt of this question paper.
2. Attempt all questions.
3. All questions are compulsory and carry equal marks.
4. Parts of the questions are to be attempted together.
5. Marks of each question and its parts are given alongside.
6. Show all your working clearly.
7. Use of simple calculator allowed.
should
8 Answers may be written either in English or Hindi; but the same medium
be used throughout the paper.

7.

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851
Explain about the principles to be
1. (a) State the meaning of contingent assets. (6)
measurement of a provision according to AS Z9.
considered for the

(b) Write short note on :

(i) Convention of fulldisclosure
(ü) Cost concept (6)

(c) State the accounting principle involved in the following statements.

() Drawings account is debited for cash withdrawn from bank by the
proprietor for his personal expenses.

(ü) Unless there is evidence to the contrary it is assumed that business will
not be liquidated in the near future.

(i) Advance received from customer is not recorded as sales.

(iv) Life of a business is broken into several parts called accounting years
or financial years.

(v) A pair of scissors acquired at S0 is included in profit andLoss A/c.

(vi) 1lakh Capital contributed by the owner results in increase in cash by

71 lakh.
(6)

OR

(a) What is meant by international financial reporting

standards (IFRS). Why
there is need for convergence of IFRS?
(8)
(b) What are accounting policies as per AS
5? Explain the considerations in the
selection of accounting policies. In what
policy should be made?
conditions change in accounting
(6)
(c) Write a note on
mercantile basis of accounting.
(4)
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851
annum according to
2. (a) Shoba Traders depreciated its machinery at 10% per
its machinery
the diminishing balance method and had {4,86,000 balance in
ended 31* March 2023 the
account on April 1, 2022. During the year
machinery purchased on April 1, 2020, for 60,000
was sold for 40.000
purchased
on 1t October 2022 and a new machinery costing 70,000 was
5,000.
and installed on the same date with installation charges being
diminishing
The company changed its method of depreciation on 1-4-2022 from
balances to straight-line method, rate of depreciation being 8%-per annum.
2023. (8)
Show machinery account for the year ended 31* March

Oil India is a leading distributor of petrol. A detailed inventory of petrol in

month. At the
hand is taken when the books are closed at the end of each
end of the month, the following information is available :

Sales 9,45,000
General overheads cost 25,000
Inventory in the beginning 1,00,000 litres @3 per litre
Purchases,
June 1 2,00,000 litres (@2.,85 per litre
June 30 1,00,000 litres (@3.03 per litre
Closing inventory 1,30,000 litrès

Using periodic system compute the following by FIF0 as per AS-2:

(i) Value of inventory on June 30.

(i) Amount of cost of goods sold for June

(i) Profit/ Loss for the month of June. (6)

(c) Write down any four revenues sources where AS 9 is not applicable. (4)

OR

P.T.0.
851
information of Tushar Ltd.
(a) Given below is the
month.
publish a monthly magazineon 15" of every
() Radhikapublications magazine. The sale of space for the
in the
It sellsadvertising space February 2024. The magazine
was
march 2024 issue was made in
5-3-2024
scheduled date. It received 1,50,000on
published onits
March 2024 issue.
and 50,000 on 15-4-2024 for the
soldon approval basis
( ) On 10-12-2023 goods worth 3.50,000 were
which goods
to Varun Ltd. The period of approval was 2 monthsafter
were considered sold. Buyer sent approval for 60% of goods up to
30-1-2024 but no approval or disapproval received for remaining goods
till 31-3-2024.

(ü) Sold goods6,00,000 lakhs to R Ltdon 12-3-2024 but at the request

of the buyer these were delivered on 20-04-2024.

(iv) On 5 November, 2023 goods worth 1,00,000 were sent on

consignment basis of which 30% of goods remain unsold and lying
with the consignee as on 31* March 2024.

In each of the above cases, you are required

to advise, with valid reasons,
the amount to be recognised as revenue
under the provisions of AS-9 if the
company is closing its accounts every year on 31
March. (8)
(b) M/s Ishan and Co. had a
property plant and equipment having
of {25,00,000 on 31% March book value
2024. The entity follows the
revaluating assets on yearly basis. The fair practice of
2024. You are required to pass value was assessed on 31 March
journal entries in the following
cases :
(i) If fair value as a
result of revaluation done
29,00,000. 31" March 2024 was

() If in the previous
year, the property was
74,00,000 and a decrease of that revalued downwards by
and loss.account and asset was recognised in
fair value was the profit
March 2024. assessed at 29,00,000 on 31
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851
downwards by
(iü) If in the previous year, the property was revalued
73,00,000 and decrease of that asset was recognised in the profit and
31" March
loss account and fair value was assessed at 29,00,000 on
2024. (6)

20,00,000 for a period of five

(c) A company acquired a patent at a cost of
years and its product life cycle is also five years. The company capitalised
two
the cost and started amortising the asset at 2,50,000 per annum. After
five
years it was found that the product life cycle may continue for another
years. The net cash flows from the product during these 5 years are expected
to be 79,00,000, 11,50,000, 11,00,000, R10,00,000 and 78,50,000. Find
outamortisation expense of the patent for each of these years assuming that
the patent is renewed after every five years and company changed amortisation
method from Straight Line Method to ratio of expected cash flows. (4)

The following is the Trial Balance of Mr. Amitesh as at 31.12.2022.

Particular Debit () Credit )

Mr. Amitesh's Capital Alc 86,690

Stock as on 01.01.2022 46,800

Sales 3,89,600

Return inward 8,600

Purchases 3,21,700

Return outward 5,800

Freight and carriage 18,600

Rent and taxes 5,700

Salaries and wages 9,300

Sundry debtors 24,000

Sundry creditors 14,800

Bank loan at the rate 6o per annum 20,000

Bank interest 900

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851 14,600

Printing and advertising 250

Miscellaneous income 8,000

Cash at bank 4,190

Discount earned
5,000
Fumiture and fitting
1,800
Discount allowed
11,450

General expenses
1,300
Insurance
"2,330
Postage and telegram
380
Cash in hand
870
Travelling expenses
40;000
Drawings
3,000
Input CGST
3,000
Input SGST
2,000
Output CGST
4,000
Output SGST
5,27,330 5,27,330

The following adjustment should be made :

(a) Included amongst the debtors is Rs. 3,000 due from Barun and included

among the creditors Rs. 1000due to him.

(b) Provision for doubtful debts is to be created at 5% and discount on debtors

at 2% on sundry debtors.

(c) Depreciation on Furniture &Fitting @10% shall be written off.

(d) Mr. Amitesh has withdrawn goods worth 600during the year which were
purchased with 5% SGST and 5% CGST.
851 7

(e) Interest on Bank Loan shall be provided for the whole year.

() Aquarter of the amount of printing &advertising isto be carried forward

to the next year.

(g) Credit purchase invoice amounting to Rs. 400 had been omitted from the
books.

(h) Stock on 31.12.2022 was Rs. 78,600

Prepare Trading and P&L Alc for the year ended 31.12.2022 and Balance Sheet
as on 31.12.2022. (18)

OR

(a) Titan club has following balances as on 1 January, 2023.

Prize fund R1,00,000

10% Sports fund investments (Face value 2,00,000fully paid) R1,00,000

Transactions for the year

Donation for prize fund receivedduring the year R18,000

Prizes awarded during the year 27,000

Interest received on prize fund investments during the year ?12,000

Expenses incurred on sports events during the year 74,000

Interest received ongeneral fund investments during the year 730,000

Howwill youdeal with the above items while preparing the income and
expenditure accountfor the year ended 31st December 2023 and Balance
sheet as on that date. Show the extracts of final statements. (6)

PT.0.
 8
March
851 prepared annually
as at 31st
accounts of a
Nano club are ?17,400 and
final amounted to
(b) The subscriptions in arrcar
2022 ?14,200
amounted to
At 31st March, year 2022-23
advance for the
in including
subscription
received subscriptions
respect of
were received in
During 2022-23
72,42,800
advance for the year
?21,600in
2021-22 and
RI5000arrears
for the year to ?10,600.
in arrears amounted
2023 subscription
2023-24. At31st March credited to income and
subscriptions to be
the amount of
Calculate
subscription account for the year 2022
preparing
expenditure accountby (6)
23.
preparing the income and
with the following items while
(c) How will you deal 2022 and balance
account for the vear ended 31st December
expenditure
sheet as on that date.

Particulars As at 31st December

2022 (*) 2023 ()

Creditors for stationery 30,000 50,000

Stock of stationery 90,000 70,000

During 2022 payments made to the creditors for stationery amounted

R3,00,000and cash purchases of stationary amounted to 20% of the total
purchase. (6)

4. ALtd. Opened branch shops at Jaipur and Agra. Goods are invoiced to branches
at a profit of 50% on cost. The following information relates to Jaipur branch for
the year ending on 31" March, 2024.
851

Balances as on April 1, 2023: Amount

Stock (at cost to H.0.) G0,000
Debtors 10,000
Petty Cash 1,000
Furniture 20,000
Goods received by branch at selling price from H.0. 1,95,000
Credit Sales 80,000

Cash Sales 1,10,000

Transfer from Agra to Jaipur branch at selling price 12,000

Transfer from Jaipur to Agra branch at selling price 24,000

Goods returned by branch to H.0. at selling price 6,000

Cash received from debtors 55,000

Bad debts written off 2,000
Petty expenses paid by branch 600

Goods returned by debtors to the branch 3,000

Goods returned by debtors directly to H.0. 9,000

Goods purchasedby branch from local suppliers costing ? 18,000;
payment made by H.0.
Cash sent to branch for expenses 10,000
Balances as on 31st March, 2024
Stock
Debtors

Petty cash 400

Additional Information :

(a) Goods amounting to ?15,000 at selling price were in transit from H.0. to
Jaipur branch.

(b) Depreciation at 10% p.a. to be provided on furniture.

(C) Goods purchased from local suppliers were sold at a profit of 50% on cost.
There was no stock left on March, 2024 out of these goods.

PT.0.
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851
debtor system of branch accounting. Also
under
Prepare: Jaipur Branch account account, Branch debtors
memorandum accounts like Branch stock
show various working
branch and stock reserve account as a part of
account, Goods sent to
(18)
notes.

OR

Mumbai branch office at 20% less

Jai Prakash Ltd. Delhi invoiced goods to its
instructions that cash sales are to
than the list price which is cost plus 50% with
Mumbai Branch related
be made at invoice price and credit sales at list price.
information is given as follows :

Opening stock at Mumbai at its cost 1,80,000

Goods sent to Mumbai (at cost to Delhi) Z 2,20,000

Cash sales 60 % of net credit sales

Goods returmed by credit customers to Mumbai Z75,000

Goods returned by Mumbai to Delhi Z84,000
Loss of goods at Mumbaithrough normal pilferage (at list price) Z6,000
Loss of goods by fire at invoice price); 80% of cost was recovered from
the insurance company by Mumbai branch. 6,000
Opening balance of debtors ?20,000
Closing balance of debtors 45,000
Discount allowed to Mumbai branch credit customers
27,000
Provision to be made for a discount on debtors
¿6,075
Goods received by Mumbai branch till the end of the year
Z 2,52,000
Cash remitted by credit customers to Mumbai branch
1,73,000
Mumbai Branch expenses paid by Delhi H.0.
premium of 4,000 paid for the year ending 30th (Including the insurance
June 2022.) Z19,000
Outstanding Mumbai branch expenses
{3.625
Manager is entitled to a commission @5%
such commissions, Round off of net profit after charging
the commission to the
nearest rupee.
851 11

Required : MumbaiBranch stock account, Mumbai Branch debtors account,

Mumbai Branch adjustment account, Mumbai Branch expenses account and,
Mumbai Branch profit and loss account and Goods sent to branch account under
stock and debtor system of branch accounting for the year ended 31" March
2022. (18)

s. (a) Diamond Art Co. acquired machinery on lease from Tanya and Co. on April
1, 2018 on the following terms:

Lease term: 5 years

Fair Value of machinery: 735,00,000

Useful Life: 15 years

Annual Lease Rental payable at 3,00,000, 2,00,000, 1,00,000, Z50,000

and 730,000. Implicit rate of return is 15%
0.4972 for
Present Value factors are 0.8696, 0.7561, 0.6575, 0.5718 and
the first, second, third, fourth and fifth year respectively at 15% IRR.

Depreciation: 10% p.a. on straight line basis.

(i) Whether the lease is operating lease or finance lease giving

reasons?

lessor and
(ii) How would this lease be accounted for in the books of
lessee? Pass Journal entries for this purpose for the first year in the
books of both the lessor and lessee, assuming that the accounts are

closed on 31 March every year. (10)

(b) Anjana Ltd. has two departments A and B. The latter department gets all
requirements from the A Department at the cost price. On December 31
2022, the following was the trial balance :
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851

Debit () Credit(R)
Particulars
1,00,000
Share Capital 40,000
Stock (A Department) 2,500
Stock (B Department) 5,50,000
Purchases- A 5,000
Purchases- B 6,25,000
Sales- A 75,000
Sales- B 25,000 25,000
Transfer of goods to B Department 15,000
Director's Fees and remuneration
Wages and Salaries-A
10,000
Wages and Salaries-B 20,000
Rent and Rates (3/4 to A) 4,000
Lighting (3/4 to B) 1,000
Depreciation-B 2,500
Depreciation -A 500
Office Expenses 1,500
Furniture and Fitting 10,000
Office Salaries 8,000
Equipment 25,000
Carriage Inward(A) 33,000
Investment 50,000
Income from Investments 5,000
Cash at Bank 27,000

Total 8,30,000 8,30,000

Closing Stock of A on hand was 748,000 and that in B amounted to

3.750.
It is desired to prepare complete Departmental Accounts
including General
Profit and Loss Account and Balance Sheet.
(8)

Or

(a) Arjun Ltd. has three departments A,

B and C. The following
supplied by these department for the year information is
ending 31" March, 2022:
851 13

A B C

Purchases (Units) 10,000 20,000 30,000

Sales (Units) 10,400 19,600 30,600
Selling Price per unit (?) 21 22 24
Stock at the end (Units) 800 1200 1400

Total purchases during the year were 79,59,000.

Prepare Departmental Trading A/C of Arjun Lid. Assuming that the percentage
of Gross Profit on Turnover is the same in each case. (10)

(b) Smitha Ltd. Availed a lease from Narayana Ltd. The conditions of the lease
terms are as under:

(i) Lease period is 3years, in the beginning of the year 2009, for equipment
costing 10,00,000and has an expected useful life of 5 years.
(ii) The fair market value is also 10,00,000.

(i1) The property reverts back to the lessor on the termination of the lease.

(iv) The unguaranteed residual value is estimated at 1,00,000at the end

of the year 2011.

(v) 3equal annual payments are made at the end of each year.
Consider IRR = 10%

The present value of l due at the end of 3r" year at 10% rate of interest
is 70.7513.

year at 10% IRR

The present value of annuity of ?1 due at the end of 3rd
is 2.4868.

calculate
i) State whether the lease constitute finance lease and also
unearned finance income.

(4x2)
(ü) Differentiate between Operating and Financial lease.

PT.0.