Even Semester Examination

(July-August, 2021)
Paper Code: UGMBCC04; Paper name: BUSINESS ACCOUNTING
Integrated Five Years MBA
Full Marks: 80

(The figures in the margin indicate full marks.

Candidates are required to give their answers in their own words as far as possible)

GROUP: I (Answer any five questions) (7 x 5 = 35)

(Maximum word limit: 150 per answer)

1. Define Accounting principles? Describe accounting concepts in detail.

2. From the following particulars of Asha & Co. prepare a bank reconciliation statement
on December 31, 2017.
i. Overdraft as per passbook Rs 20,000
ii. Interest on overdraft Rs 2,000
iii. Insurance Premium paid by the bank Rs 200
iv. Cheque issued but not presented for payment Rs 6,500
v. Cheque deposited but not yet cleared Rs 6,000
vi. Wrongly debited by the bank Rs 500
3. The following transactions related to M/s Tools India, prepare double column cash book
based upon following business transactions:
Date Details Amount (Rs.)
2020
Sept. 01 Bank balance 42,000
Sept. 01 Cash balance 15,000
Sept. 04 Purchased goods by cheque 12,000
Sept. 08 Sales of goods for cash 6,000
Sept. 13 Purchased machinery by cheque 5,500
Sept. 16 Sold goods and received cheque (deposited same day) 4,500
Sept. 17 Purchase goods from Mr. X in cash 17,400
Sept. 20 Purchase stationery by cheque 1,100
Sept. 24 Cheque given to Rohit 1,500
Sept. 27 Cash withdrawn from bank 10,000
Sept. 30 Rent paid by cheque 2,500
Sept. 30 Paid salary 3,500
4. Differentiate between provisions and reserves. How are provisions created? Give
accounting treatment in case of provision for doubtful Debts.
5. M/s Singhania and Bros. purchased a plant for Rs. 5,00,000 on April 01, 2017, and
spent Rs. 50,000 for its installation. The salvage value of the plant after its useful life
of 10 years is estimated to be Rs. 10,000. Record journal entries for the year 2016-17
 and draw up Plant Account and Depreciation Account for first three years given that
the depreciation is charged using straight line method if:
i. The books of account close on March 31 every year; and
ii. The firm charges depreciation to the asset account.
6. From the following information, calculate –
i. Trade receivables turnover ratio
ii. Average collection period
iii. Trade payable turnover ratio
iv. Average payment period
Given:
(Rs.)
Revenue from Operations 8,75,000
Creditors 90,000
Bills receivable 48,000
Bills payable 52,000
Purchases 4,20,000
Trade debtors 59,000
7. From the following information, calculate cash flow from operating activities using
direct method.
Statement of Profit and Loss
For the year ended on March 31, 2015
PARTICULARS AMOUNT(Rs)
i. Revenue from operations 2,20,000
ii. Other Income --
iii. Total revenue (i+ii) 2,20,000
iv. Expenses:
Cost of materials consumed 1,20,000
Employees benefits expenses 30,000
Depreciation 20,000
Other expenses: Insurance Premium 8,000
Total expenses 1,78,000
v. Profit before tax (iii-iv) 42,000
Less Income tax (10,000)
vi. Profit after tax 32,000

Additional information:
Particulars April 01, 2014 March 31, 2015
(Rs) (Rs)

Trade receivables 33,000 36,000

Trade payables 17,000 15,000
Inventory 22,000 27,000
Outstanding employees’ benefits 2,000 3,000
Expenses:
Prepaid insurance 5,000 5,500
Income tax outstanding 3,000 2,000
GROUP: II (Answer any three questions) (15 x 3 = 45)
(Maximum word limit: 300 per answer)

8. On January 1, 2015, the Director of X Ltd. issued for public subscription 50,000 equity
shares of Rs. 10 each at Rs. 12 per share payable as to Rs. 5 on application (including
premium), Rs. 4 on allotment and the balance on call on May 01, 2015.
The lists were closed on February 10, 2015 by which date applications for 70,000 shares
were received. Of the cash received Rs. 40,000 was returned and Rs.60,000 was applied
to the amount due on allotment, the balance of which was paid on February 16, 2015.
All the shareholders paid the call due on May 01, 2015 with the exception of an allottee
of 500 shares. These shares were forfeited on September 29, 2015 and reissued us fully
paid at Rs. 8 per share on November 01, 2015. The company, as a matter of policy, does
not maintain a calls-in-arrears account.
Give journal entries to record these share capital transactions in the books of X. Ltd.
9. The following were the balances extracted from the books of Yogita as on March 31,
2017:

Debit Balances Amount (Rs) Credit Balances Amount (Rs)

Cash at bank 2,630 Sales 98,780
Cash in hand 540 Return outwards 500
Purchases 40,675 Capital 62,000
Return inwards 680 Sundry creditors 6,300
Wages 8,480 Rent 9,000
Fuel and Power 4,730
Carriage on sales 3200
Carriage on purchases 2040
Opening stock 5,760
Building 32,000
Freehold land 10,000
Machinery 20,000
Salaries 15,000
Patents 7,500
General expenses 3,000
Insurance 600
Drawings 5,245
Sundry debtors 14,500

Taking into account the following adjustments prepare trading and profit and loss
account and balance sheet as on March 31, 2017:
i. Stock in hand on March 31, 2017, was Rs. 6,800.
ii. Machinery is to be depreciated at the rate of 10% and patents @ 20%.
iii. Salaries for the month of March, 2017 amounting to Rs. 1,500 were
outstanding.
iv. Insurance includes a premium of Rs. 170 on a policy expiring on September
30, 2017.
v. Further bad debts are Rs. 725. Create a provision @ 5% on debtors.
vi. Rent receivable Rs. 1,000.
10. Journalise the following transactions of M/s Mallika Fashion House and post the entries
to the Ledger:

Date Details Amount (Rs.)

2019
June 05 Business started with cash 2,00,000
June 08 Opened a bank account with Syndicate Bank 80,000
June 12 Goods purchased on credit from M/s Gulmohar Fashion House 30,000
June 12 Purchase office machines, paid by cheque 20,000
June 18 Rent paid by cheque 5,000
June 20 Sale of goods on credit to M/s Mohit Bros 10,000
June 22 Cash sales 15,000
June 25 Cash paid to M/s Gulmohar Fashion House 30,000
June 28 Received a cheque from M/s Mohit Bros 10,000
June 30 Salary paid in cash 6,000

11. What do you mean by bonus issue? Explain its advantages and disadvantages from
investor’s as well as company’s point of view.