BBA 203 - FINANCIAL ACCOUNTING

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DRIVE	WINTER 2015
PROGRAM	BBA
SEMESTER	II
SUBJECT CODE & NAME	BBA 203 - FINANCIAL ACCOUNTING
BK ID	B1520
CERDIT	4
MARKS	60

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ASSIGNMENT

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.  

Question1 - 1 X, Y & Z were partners sharing profits and losses as 3:2:1. Their Balance Sheet as on 31.03.2015 were as under :

Liabilities	Rs.	Assets	Rs.
Capital A      1,00,000 B        70,000 C        40,000	1,80,000	Freehold Premises Building Machinery	1,60,000 60,000 90,000
Reserves	90,000	Investments	20,000
Cash Credit	30,000	Inventories	30,000
Creditors	20,000	Receivables	30,000
Bill Payable	20,000	Cash	10,000
	3,40,000		3,40,000

C expired on 1st April 2015. So, the assets are revalued and liabilities re-assessed as follows :

i) Create a provision for doubtful debt Rs. 1,000. ii) Building is to be depreciated by 5 %. iii) Machinery is to be depreciated by 10 %. iv) Goodwill of the firm is to be valued at Rs. 30,000. 

The balance due to C will be transferred to his executor’s loan account which will carry an interest of 10 % p.a. Prepare Revaluation Account, Capital Accounts and the Balance Sheet of new firm after adjustments.  

Based on above, prepare :

a) Revaluation Account

b) Capital Accounts  and

c) Balance Sheet as on 1st April 2015

Answer1-

Revaluation A/c

Dr           Particulars

Amount

Cr Particulars

Amount

Question2- The Cash Book of Exception Ltd. furnishes the following balances on 25th  October 2015. Cash in hand  4,200;   Cash at Bank 7,650;  Discount Allowed total  420  and  Discount  Received total Rs. 950.

The following transactions occurred during last week of October 2015 :

April 26  : General expenses Rs. 920 paid in cash          

26  : Cash Sales Rs. 9,200        

27  :  A cheque Rs. 3,040 received from a debtor, K. Ball in full settlement of Rs. 3,200.       

27  :  A cheque sent to supplier, Baker Ltd. in settlement of dues Rs. 14,000 less 5 %  Discount.     

28 :  Bank notified that a cheque Rs. 2,210 received from Mc Dermot returned dishonoured.      

30 :  An old delivery van was sold for Rs. 71,000 and a cheque received.     

30  : A cheque sent to a supplier, Ford Ltd. in immediate payment of an invoice, list price Rs. 8,000, less 25 % Trade discount and 5 % Cash discount. 

Prepare a Triple Column Cash Book in the books of Exception Ltd.  

Answer2 –

Date

Particular

Discount

Cash

Bank

Date

Particular

Discount

Cash

Bank

Question3 - What do you understand by goodwill? Explain the accounting treatment of goodwill at the  time of admission.  Give journal entry for the below problem: T and S are partners in a firm sharing profit in the ratio 5:3. They admitted G as a new partner for 1/4th share in the profit.  G brings Rs.45,000 for her share of goodwill and Rs.1,20,000 for capital. They have withdrawn the goodwill from the firm. Make journal entries in the books of the firm after the admission of G. The new profit sharing ratio will be 2:1:1.  

Answer3 –

Goodwill :-Goodwill is the present value of firms anticipated excess earning.

Treatment of Goodwill on the admission of new partners

1. Goodwill brought by new partner in cash –

        I.            Bank              A/c              Dr

                                To Goodwill

      II.            Goodwill     A/c                Dr

                                To old

Question4- Accounting refers to a systematic knowledge of accounting. It explains ‘why to do’ and ‘how to do’ of various aspects of accounting. Explain the objectives of accounting and explain the categories of users.  

Answer4 –

Accounting operates within a broad socio-economic environment, and so, the knowledge required of the accountant cannot be sharply compartmentalized.It is therefore, difficult to discuss one area without relating to other areas of knowledge. We place a great emphasis on the conceptual knowledge. The accountant should not only know but he should understand.

Objectives of Accounting

Question5 - Prepare Trading , Profit and Loss Account and Balance Sheet from the following particulars as at 31st March 2015.

Particulars	Dr (Rs.)	Cr (Rs.)
Capital/Drawings	1400	10000
Cash in Hand	1500	-
Bank overdraft @ 5%	-	2000
Purchase and Sales	12000	15000
Returns	1000	2000
Establishment Charges	2500	-
Taxes and Insurance	500	-
Provision for Doubtful Debts	-	1000
Bad Debts	500	-
Sundry Debtors & Creditors	5000	1850
Commission	-	500
Investments	4000	-
Stock on 1st April 2014	3000	-
Furniture	600	-
Bill receivables & payable	3000	2500
Collected Sales Tax	-	150
	35000	35000

Further, you are required to take into consideration the following information: 

a) Salary Rs.100 and taxes Rs.400 are outstanding but insurance Rs.50 prepaid 

b) Commission amounting to Rs.100 has been received in advance for work to be done next year.

c) Interest accrued on investments Rs.210

d) Provision for doubtful Debts is to be maintained at 20%

 e) Depreciation on furniture is to be charged at 10% p.a.

 f) Stock on 31st March 2015 was valued at Rs.4,500

g) A fire occurred on 25th March 2015 in the godown and stock of the value of Rs.1,000 was destroyed. It was fully insured and the insurance company admitted the claim in full.

Answer5-

                                                               Trading and Profit and Loss A/c

Particular

Amount

Particular

Amount

Question6-  From the ledger balances as on 31st March 2015 show treatments in Profit and Loss Account  and in Balance Sheet.

Debtors : 50,000;  Bad Debts : 3,000;  Discount Allowed : 2,000; Creditors: 30,000; Provision  for Discount on Creditors : 400; Discount Received 300.

Adjustments :

 i) Create a provision for Bad Debts @ 10 % on Debtors

 ii) Create a provision for Discount on Debtors @ 5 %

iii) Additional discount given to Debtors Rs. 1,000

iv) Create a provision for discount on Creditors @ 2 %.

Answer6 –

                                                                             Profit and Loss A/c

Dear students get fully solved assignments

Send your semester & Specialization name to our mail id :

DRIVE	WINTER 2015
PROGRAM	BBA
SEMESTER	II
SUBJECT CODE & NAME	BBA 203 - FINANCIAL ACCOUNTING
BK ID	B1520
CERDIT	4
MARKS	60

“ help.mbaassignments@gmail.com ”

or

Call us at : 08263069601