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AW-z708-Add
M.Com. (Scmcster-I) (CGS-Ncrv) Examination
ADVANCED FINANCIAI, AIiD COST ACCOT]NTING
Timc: ThreeHoursl fMaximum M;rks : 80
Notc; (l) All qucstions are conlpulsory. SectiorlAand Section B should hoth be solved.
(2) lhe figurcs to tho right indicate urarks 10 lhE clucstion.

(3) Give $orking note wh€rever necessary.

SEC'UO\-A
1. Book keeping is concemed with I

(a) Recordingoflinancialtra,rsactioDs (b) Classificationoffinancialtransaclions

(c) Summarisation oflinancial transactions (d) Both (a) and (b) I
2. ln the books of manuiactu ng concerns, opcning stock consist of :
(a) Raw N'faterial (b) \\'ork in Progress
(c) Finished Goods (d) AII ofthe above 1

3. Rectilication entry for Rcpairs oflvlachine were dcbited to N{achineryA",c :

(a) Machincry A/c Dr, Cash A/c Cr. (b) Rcpair A,/c Dr., Suspensc A/c Cr.
(c) Rcpair Ai c Dr.. Cash .d/c Cr. (d) Rcpair A/c Dr., Machincry A"-c Cr. I

4. Ifthc Sharcs are valued on the basis of net \a'orth ofthe business, the method is calied as :
(a) Intrinsic \hlue Method &) Supcr Proiit N{elhod
(c) AveraSc Profi1. Mcthod (d) None ofthcsc t
5. AllAssets and I iabil.trcs ar, shoun in :

(a) 'liading /c (b) P & LA/c

(c) & L Appropriation di c
P (d) Balance Shcet I
6. Loss on salc oi lixed asscts is translerred to :

(a) lrading.dlo (h) P&LA/c

(c) P & L Appropriation Ai c (d) BalaDce Shcct I
7. Capital Ileduotion r\ccount is opencd in case of :

(a) Iulernal l{cconstruction (b) Extemal I{cconstruotion

(c) A.malganution (d) Absorption I
8. Absorprion mcans:
(a) Purchasing an cxisting compamy (b) Lhuidating one company
(c) Acquiring sharcs in othcr company (d) None ofthese I

9. Whicll ofthe following docs not appear in Cost Sheet ?

(a) Iractory Cost (b) Cost of Salcs
(c) ilad Dcbt Losses (d) Opcning Slock oIWIP 1

10. Srhich ofthc follo\ing is an exanlple oflixed Cost ?

(a) Direct Material Cost (b) Works Manager's Salary
(c) Salesman Commission (d) Depltciation ofmachinery on houdy basis
I

YllL- 15187 I (Contd.)

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I l. N4atgilla Cosl is anollu,;r rrourt fl,r rvhich cI Lhc f,rllou'ittg I

(a) l'rirneCosr (b) F;xed Cost
(c) Vnriablc Cost (d) Production Cost I

12. Elerncnts of cosr of a proclJct a-re :

(a) Ma--erlilon1] 1l) Labour on1-v

(c) Jixpenses only (d) Nlatcrial, labour and expcnses I

1i. I\Ielhod ofcosling ii uscd !\hcn it is desired to.rsccfiain the cost of calrying oul an
opcration in a dcparturenl.
(a) Opiralilg Costirg (b) Ot)eration Costing

(c) Compositc Costing (d) Process Costing I

14. Servicc Costing is used b1 :

(a) gcncratron
Power (b) Hospitals
(c) lransport companies (d) All ofthe abovo I
15. Dcscribe the method ofcosting to Le apflicd in casc ofNursinS llomc :

(a) Ot,crating Costins (b) Process Costing

(c) Ccntract Cosr.ins (d) lob Cosling I
16. ALorrl ofcarrying5 totncs ofgoods norrnally carlies 80% oi thc load onthe outward
capable
jouJrel and 400/o ol the lor.l on inu ard iournev. I he jourire) is 300 knr for one side- It 1ak.s
tr.io da.,,s to oomplclc thc rcturn lrip io a ycar of ll00 dals. Cornputc lhe tonnes k-m. I
(a) 2.'/0.000 tonncs kn (b) i,00.000 tonnes km
(c) 3.10.000 tooncs km (d) 3.40,000 torocs km t
17. Vhich ofthc iLllo\\':ng is nrost likcL1 ic lse a Process Cost Accounting S)s1em ?

(a) {rnrparl\
ConslructioD ( (1.) l'rint Shop
(c) SILip )3uildcr (d) SLrgar Il.ciineries I

18. In process (osline if an abncrrmal loss ariresirl the proc('ss account it is gencrally :

(a) Dcbitcd l\,ith the scrap valuc oithe ahrlormal loss uoits
(b) Debitcrl sith the lull producliol cc,rt ofrhe rbnormal loss units
(c) Credited with the scr-ip valrrc ofthe abnormal loss units
(d) Crcditcd q,ith the i'ull p:L1i.iucrior. cost ol'thc arnorr:ral loss unirs I

19. ColtruLct in \r,hicl't lcimbtLrscmcnt is hased on actual allo\\'able cost plus a llxod fce is callcd :

(a) Specialcootract (b) Cosr plus conrraot

(c) Bcgular contr-.r (d) Cost contracr I
20. __ is the aggregareJ cosr rclative to a singlc contrect designaled a cos! unit :

(a) ( ost plus contlacr (b) $brk cerLified

(c) Work nol ocrtiliec (d) Contract cost I

Yl!c Li:ill / l (Co!(tl l

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SECTION-I]
I The hook keepcr finds tle difcrcnce ir thc Trial llalancc
amounting to Rs. 10,000 and puts it
in thc Suspense Aocount, Latcr on he dotccts lhe following eno$ :
(i) Purchascd goods lrom Arvind Rs. 45,000 but entcred into Sales Book.
(ii) Ileccived one bill for Rs. 25,000 Aol11 Anil but recorded in Bills Payable Book.
(ii) Initcmof Rs. 12,500 relating to Prepaid RertAooount was omitted to be brought forward.
(iv) An itcm of Rs. 3,000 in respect of Purchases Rcturn, had been rvrongly cntcrcd in the
Purchasc Book.
(v) Bills payable of I{s. 25,000 paid to Dincsh against our acceptance were debited to Deepak's
Account.
(vi) Bill Lcceilcd frorlr Jayant for repain done lo computer lls. 4,500 ald computer supplicd for
Its.45,000 were entcred in Purchases Ilook as Rs.46,000.
Give rcctilyingjournal entries with fLrll na alion and prepare Suspense Account and show efl-cct
ofiton Profit. \2
oll
from the following Ilalance Shect of Anu LId. as at 31" Ilarch, 201 8, find out the value of
goodwill according to super profit method assuming thrcc )car's purchase :
IJalancc Shect
As on 31'r March,20l8
Liabilitics
Capital
4,000
:

Prclerence Shares of
^.mount
Ass ets
Building at cost
Fumitlre
-r Amount
75,000
8olo 2,000
Rs. 10 each fully paid up 40,000 Stock in Tradc
20,000 Equity Sharcs of (at Markct Valuc) 2,2 j,000
Its. l0 each fully paid up 2,00,000 59',lnvestmcnts t,50,000
Reserve I und 1,1,000 Book Dcbts i0,000
Profit & Loss.d/c Balaocc : Rcserve 500 47,500
1'' April, 2017 20,000 Cash and tsank Baiancc 5 5,5 00

31" March, 2018 2.10,000 2,10,000 PreliminaD, Expcnscs 7,000

I)eprcciation fund:
Building 8,000
Invcstmenls 2!,!S0 28,000
Creditors 18,000
5,60.000 5,60,000
The follorving intbrmalions are supplied to you :

(i) Present valueofBuilding is Its.2,10,000.

(ii) Normal ratc ofreturn is 10olo p.a.
(iii) Profits lbr past threc years have shown an increase ofRs. 40,000 annually
(ir) Invcsrments consist of 1,500 596 Gold Bonds ofRs. 100 each.
(v) Assume taxation @ 50%. t)-

YBC-1538? l (Conrd.)
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Pl.rsto Pipr:s Co. Ltd. had an authorjsiC L.apital oI Rs. 1,20.00,000 in Ecluity Sharcs of
Rs. 100 each. Thc lirllowlng i, rlrc lrial Ba.ance ol thc compan) as on 31,, March, 2013 :
ll ii. l{s
l
Prcmises 60,00.{)00 Share Copilal
Plant ud Machinerr /r.00.0u0 Authoriscd and paid up
I
Interin Dividend 1 .5 0.1)n0 92,000 liquitl' Shares of I

Purchases 40.00.0(,0 L Iis. 100 each 92,u0,000

Prcliminaw Expcnscs ,,oo,ooo i
Gener:Ll llescn'e
I s.oo ooo
FrciglLt
I)irector's I:cJs
2.62,000
t,r4.800i P & L
69./o Debcntures
.{,',c
I 6o,oo.ooo
2.00.000
Bad l)ebts 12,21)A Smdry Creditors r0.00.u00
Covl. Sccurities I2,00. Lrn 0 l'rovision ii)r doubtful l)ebrs
I 70.u0[,
Slocl. i-,1,2017 t 5.(10.010 Sales 88.00.t,0ti
Fi\1ures 1.1 ,a)0(, ll pa) r bl ,.uo o.,o
Sundry Debtors 17.10.00t| |
Gooru,ill s.rl.0u0 I

\l'ag:s 17,,14,000
Cu;I, in I-land
CaslL ar Bank 7,98,410r1

Gen,:ral Exp;nsr-s 2.9(r.00al

,j8.
Salaies i. ( r(l
U

Debcnture lntercsl 1,tt0,000

Clall inArrears l,i0 000
Sharcs of Pratik Co I td 1.10.,)00
2.66,20,000 2,66,20,000 I
Prcpare the IrinalAccounrs ol lhc Con-pirny and Balancc Sheet as on 31,,N{a.ch.201g after
taking into considcration ofthc lbllo\\,in! adtustmeDts :
(i) Stock or1 31.'\.Iarch. l0l3 \{as Rs. 26.00.000.
(ii) Transfcr Rs. 1,00.000 lo Ceneral l{cscrve.
(ii) Writc olF pre)iminar\' .:xpe:ucs 209,i.
(ir) tsa,l debts prorision shall bc 59i, on Dcblori.
(v) Prcvision lbr deprecialiol :
(a) Premises (q 5.u;
('b) Plant ,Lnd \'lachirrcry,@ 109n
(0) Fixtules at 5%
(vi) Provision lir'faxation lis. 2.50.0i10.
(r,ii) Directols proposcd 596 di!iden.1 cr Equit) Sharc Capital. 1l
OR

YB'-l-li38l I (l-,)nti.)
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On Slst I\4dch, 2018, Jaya Co. Ltd. and Riui Co. Ltd. were amalgamatcd into Jayarani Co
Lrd. on the basis oflollowing Balance Shccts :
Brlsrlcc Shccts
,Iaya Ilani Joya Rani
Co. Ltd. Co. Ltd. Co. Ltd. Co.Ltd
(Rs.) (Rs.) (R.sJ (Rs.)
Authorized Capital Gooduill 80,00{.) 30,000
Equit-v Shares ofRs. l0 Building 50,000 60,000
each ') )1 000 00 000 Plant 41,000 10,00t)
Paid up Capital ),24-AA0 2,00,000 Stock 42,000 3 3,000
Creditors 5,000 6,000 Debtors 23,000 40,000
l{eserve 8,000 10.000 Cash 12,000 22.t)00
Profit and Loss A/c
(l lst l,larch, 2017) L 1.000 4.000
2,.r 8,000 1,95,000 2,48,000 1,95.000
It was agreed that in respect ofboth companics l0% should be written offfrom Building
and 5oZ to be providcd for bad and doubtfui debts. Goodwill is to bc valued at throe ycars
purchase of the Iast two years' averagc profils. l hc Profit of Jaya Co. Ltd. and Rani Co. Ltd.
for 31'r March,20l8 were Rs. 13,000 and Rs. 6,000 rcspectivcly.
From the abovc information pass thc ncccssaryjoumal enffies in the books of Jayarlmi Co.
Ltd. and prepare Opening Balance Sheet. 12

What is a Cost Sheet and why is it preparcd 'l Prcpare a Cost Sheet with imaginary figures.
I2
oll
'lhc books and rccords of a factory present the following information loi the monlh of
,August, 2018 ofa product :
Direct Expenscs Rs. 40,000
Direct I-abour being 1809/0 ofFactory Ovcrhcad Rs. 1,80,000
Cosr of Goods sold Rs. 7,00,000
StockAccoLurt' shuu thc fullowing position :

f iAugust,2018 31"'August,2018
Raw Marerials 1,08,000 1,26,000
'Work
in Progress 1,00,000 1,32,000
Finished Goods 1,40,000 1,80,000
Othcr Inlormation :

Selling Expenses Rs.36,000

Ollice Expenses (10% offactory overheads)
Sales Rs. 8,50,000
You are required to prepare a statement showing Cost and Profit for the month. 12

Yllc t5t8? 5 (Contd )

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.+ From the following data (,f r lc\lilc laclort machinc rooIIl, computc thc hourl) machinc ratc.
assLlmin! that tha machini rocrrn BiLl \',ork on 909a capacil)' throughoul the year and tha! a
breakdor,,n allor.rance of t()9n is reasonab:e. There are rhree iroldidays at Deepavali, 2 at Holi
a d a1Christnras exclusive of Sunda.vs. 'fhe factory works 8 hours a day on 5 days arLd ,l hours
on Saturdays. The nunlber of machines (eaoh ofsame type) = 40.

Rs. (per annum)

Po\\er - 1.12,000

I igh'jng - 61,000

Salaries lbr lbrcrncn - 1.20,000

t.ubdcathg Oil - 6,600

Repairs to machine 1.44,600

Deprcciation - 78,500

7.l5.700 tl
oll
The Gou.i Inn llotel bas 40 bcd rooms with maximum occupancy of 490 sleepers nights pcr
week. A.'erage occupaoc) is 60% throughout thc year Meals provided to guests have bccn
costed a]ld the avcragc food cost per person pcr da1 is as lbllows :

Break-fasr Rs. la
l.ua:h Rs. ll i)

Dimer l{s. I3.1

Direcr \\'ages and Stali l\{eals pcr },cck iLrc as follo$.s :

Restaurant and Kitchcn I{s. 3,1.30(r

sekeeping
IIot Rs. 19.52i1
Ceneml Rs. 17.60t)
Direct Er:penscs pcr alxlur]l arc Rs. 4,57,6!0 lol IIousekeeping ud Ils. 5.20,000 for the Restauant.
Indirect Experlses anlount lo Ils. 4.16,[ 00 $hich should be appoltjorcd on the basis of 1]oor
area. 'Ih,: floor areas are :

Iicdruom t.(,t,r Lq. n (tr.s

Rcs.alranl L 2 0 :l n cler,

Ser,,icc arca 600 s( . me'rers

ANel Profit of l0% cach must be made orl thc rostauranl takings and accornmodation takings.

You are rcquired to calculate rvhat inclLrsivc terms pcr person sholrld be chargcd pcr da).
Show thr: split hctll,ccn n:cals and accornrr-rodation charges- 1)

YB(:-lsin? 6 (Contd )
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A.factory mtulufactures 'N os main producr and its by-prr.rducts are B arrd C. The joint cxpcrrsus
ofnlanufacture ale tlle follorving :
Particulars ll.s,
Materials iJ,000
\lhges 6,000

Indirect cxpenses 9,000

Subsecluent oxpcnses aro lhc followitlg :

I} C
Ils. Rs. lls.
Nlaterials 2,000 1,500 800

Labour 1,000 1,000 r,100

lndircct cxpenses 500 500 400

3,500 3,000 2,500

Sales Valuc 40,000 30,000 30,000
Estimatcd Profir on Sales 25% 20'1" lA%
Prepare Process Accounts and show apporlionment of.joint cost among A, B and C. 12

OR
What is meant by the tern1 "Cosl Audit" ? What are the objectives and advantages of Cost
Audit ? 12

}BC-IJ]8' j5