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Wednesday, October 27, 2010

Question collection of Financial Accounting II from VS Moketan College


V.S. Niketan College
I Module Test
2061
                                   
                        Subject: Financial Accounting II                                                                    F.M. 50
                        Class: BBA 2nd Semester                                                                                P.M.   25
                        Time: 1.5 hours
                       
QN. 1. The following information is available to assist you in preparing a bank reconciliation statement for Rara Craft Co. on January 31, 2004:
a.       Balance as per bank                                        Rs. 12,700
b.       Outstanding cheques                                         Rs. 6,800
c.        Dishonored cheques returned by bank              Rs. 900
d.       Cheque under collection                                   Rs. 1,100
e.        Bank service charge for January                        Rs. 120
f.        Bills receivable collected by bank                   Rs. 2,000
g.        Interest on preceding bill                                      Rs. 100
       Required: i. Bank reconciliation statement for the month of January 2004, showing the cash balance to be shown in Balance sheet as on 31, January 2004                                                                                                                           [10]
ii. Prepare the necessary entries on the books of Rara Craft Co.                                                              [5]
QN. 2.
 a. . Following informations are extracted from the inventory record of Chaudhary Bros. from October 1 to                        December 12, 2003:
                                Net sales from October 1 to December 12                      Rs. 48,000
                                Beginning inventory – October 1                                      Rs. 9,600
                            Purchases from October 1 to December 12                    Rs. 28,000
On December 12, 2003 a portion of Chaudhary Bros. inventory is destroyed by fire. The company determines by physical count, that the cost of the merchandise not destroyed is Rs. 1,600. & gross profit ratio as 30% of net sales. The company needs to estimate the cost of inventory lost for purposes of insurance reimbursement which is agreed to pay Rs. 2,000 as a full settlement for the inventory lost in the fire.

Required: Journal entries in the books of Chaudhary Bros. to record the Insurance settlement after necessary              calculations for: Amount of gross profit, Cost of goods sold, & Value of ending inventory at the time                  of fire.                                                                                                                                                                    [7]
           b. Record the following transactions in the form of journal entries so as to highlight the difference between; Periodic      & Perpetual inventory systems.                                                                                                                                                    [8]
Jan – 1, 2004       Purchased on account 4,000 units @ Rs. 1 each.
Jan – 5, 2004       Returned 800 defective units, which were damaged in transit.
Jan – 12, 2004     Sold on account 1,600 units @ Rs. 1.25 each.


QN. 3.
            a. Bloomer Company purchased new machinery on 1st January 2000. for Rs. 10,000. The machinery has four years         life and zero residual value at the end of the fourth year.
       
Required:
                                                              I.Calculate the depreciation expenses for each of the four years using straight-line method and the double declining balance method. (Show the depreciation expenses in columnar form for comparison purposes.)                        
                                                            II. Assuming that the Bloomer Company falls under the 40% tax bracket; calculate the amount of tax saved by the Company for the year 2000 using the double decline & straight-line methods of depreciation.                                                                               [7]


b.       Gahana Kunja distributes fine stones. It sells on credit to retail Jewelry stores and extends terms of 2/10, net 30. For accounts that have probability of collecting the receivables as follows:

                               Not yet due                                                                               95%
                               One month past due                                                               80%
                               One to two months due                                                          60%
                               More than two months due                                                   40%
On December 31st 2003, the credit balance in allowance for doubtful account is Rs. 12,300. The amount of gross receivables by age on this date is as follows:

                               Current (not yet due)                                                 Rs. 200,000
                               Past due:
                               Less than one month                                                   Rs. 45,000
                               One to two months                                                      Rs. 25,000
                               More than two months                                               Rs. 10,000
Required: Prepare a schedule to estimate the amount of uncollectible accounts at December 31st 2003 and prepare            necessary entries to adjust the allowance for doubtful debt account.                                                   [8]

QN. 4. Write short notes on: ( any two)                                                                                                                                 [2.5×2=5]

                                a. Credit memoranda         b. Depletion expenses         c. Non interest bearing notes



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