Dr. V.R.

Godhaniya College Subject: Accounting And Finance-2 Date:18-2-2012 Time: 3 Hours Total Marks:100

Q.1

Hiralal is a small farmer. He gives you income and expenditure figures and other (20 Marks) Rs. 24,000

information for his farm for the year ended on 31-3-2008.

Particulars
Opening stock : Fertilizer 18,000 Paddy 12,000 Pesticides 15,000 Purchase : Fertilizers 50,000 Diesel 30,000 Seeds 20,000 Wages paid Pt. Workers 10,000 Casual wor. 6,000 Expenses of Live stock Tools repairing Insurance premium: Crop 3,000 Live stock 7,000 Land revenue Other Information :

Rs.

Particulars
Farms electrical motor bill

45,000 Production of milk was 3,000 liters. It was sold out at Rs. 12 per litre 1,00,000 Instalments of tractors loan (including intrest Rs. 6,000) 10% Sahakari Mandlies loan on 1-4-2007 Depriciation on farms assets Ghee was sold 150 kg. at Rs. 100 per kg. Paddy was sold out 36,000 36,000

16,000 15,000 10,000

50,000 9,000 15,000

10,000 3,000

10,000

1) Production of wheat was 13,500 kg. Which cost to be considered Rs.8 per kg of this production : Wheat of 12,000 kg. were sold at Rs. 10 per kg. Wheat of 400 kg. were taken for personal use. Wheat of 200 kg. were stolen away. Wheat of 300 kg. were used for feeding his cattle.

2) Production of Millet was 7,000 kg. Which cost to be considered Rs. 5 per kg. Out of this production : Millet of 6,000 kg. were sold at Rs. 8 per kg. Millet of 300 kg. were taken for personal use. Millet of 200 kg. were given as donation. Millet of 200 kg. were given to workers in lieu of wages.

Prepare Farm Account.

OR Q.1 Bajrang Stores of Khadlpur has a Branch in Kathravi. The Head office
sends goods to the branch with an instruction to sell the goods at cost plus 20% profit. From the information given below. Prepare Branch Account, Branch Debtors Account and petty Cash Account. (20 Marks) Opening Balance (1-1-1996)
Stock (cost price) Debtors Furniture Petty Cash Goods Sent to Branch Total Sales of the Branch Goods returned by Branch (Cost price) Goods returned by Debtors Bad Debts Discount allowed to Debtors Cash remitted to Branch Salaries Rent Sundry Expenses Petty cash Furniture sent to Branch (1-4-96) Closing balances (31-12-96) Stock (Cost price) Petty cash 600 240 9,600

Rs.
6,000 9,000 15,000 60 36,000 60,000 3,000 1,200 1,200 300 6,000 2,400 900 300

9,600 3,000

Other Information
(1) Furniture is to be depreciated by 10% (2) The Branch had remitted Rs. 48,000 to the Head Office during the year, of which Rs.30,000 were pertainig to cash sales.

Q.2 (a) Fire took place in Aartis godown on 14-3-2000. All stocks except of Rs.
3,600 were destroyed due to fire. Prepare statement of claim from the following information : (15 Marks)

Particulars

1997 Rs.

1998 Rs. 1,12,000 1,50,000 10,000 8,000 44,000

1999 Rs. 1,29,000 1,80,000 13,000 7,000 33,000

Purchases 1,08,400 Sales 1,60,000 Wages 24,000 Depreciation 8,000 Opening stock 55,000 Stock is valued at 10% more.

Up to 15-03-2000 Rs. 56,000 60,000 6,000 2,000 11,000

(b) Write a Short Note on Average Clause OR

(5 Marks)

Q.2 A Product passes through three process A, B and C and ultimately to finished stock
account. production of process A is transferred to realise 25% profit on transfer price. From B to C and from C to finished stock transfer is made to realise profit 20% on each transfer price.

Particulars
Opening stock Direct Material Direct Wages Factory Over heads Closing stock Inter process profit for opening stock

Process A Rs.
5,000 10,000 7,500 7,000 2,500 -

Process B Rs.
6,000 10,500 7,500 3,000 3,000 1,000

Process C Rs.
4,000 15,000 8,000 20,000 2,000 1,000

Finished stock Rs.

15,000 7,500 5,500

Stock of each process is valued at prime cost. Finished stock is valued at cost price received from process C. Sales of finished stock is Rs. 2,00,000. Prepare the followings : 1. Process Accounts and finished stock account 2. Actual profit earned statement. 3. Valuation of stock statement.

Q.3 Public Health Centre who runs Doctor House hospital, has taken a building on rent
for Rs. 20,000 per month for the hospital. The hospital has 25 beds and five extra (additional) beds can be accommodated in case of need. Permanent staff of the hospital is as under ; (20 Marks) 2 - Supervisors, monthly salary of each Rs. 2,000 4 - Nurses, monthly salary of each Rs. 1,200

2 - Wards-boys, monthly salary of each Rs. 600 Hospital was open for 365 days of the year. The following information is revealed from figures of one year. 1. On 120 days of the year, all beds were utilised. 2. On 80 days, average 20 beds were used. 3. When the extra beds were required, the hospital had to arrange the same from outside by incurring rent of Rs.20. For this purpose, Rs. 8,000 were paid for rent. On one day, maximum 5 extra beds can be accommodated. This additional arrangement was made for 120 days mentioned in (1) above. The expert doctors from outside were given remuneration according to services rendered by them; which amounted to Rs. 40,000. The details of expenses are as under :

Particulars

Annual Rs.

Building maintenance and repairing 14,400 Meals etc. to patients 1,76,000 Expenses for services rendered to patients 48,000 Laundry expenses for clothes bed-sheets etc. 1,12,000 Expenses for medicines 1,40,000 X-ray, Oxygen etc. expenses 2,16,000 General administrative expenses 1,99,600 If charge of Rs. 400 per day is recovered from patients, find profit or loss.

OR Q.3
Surat Gas Co. has decided to rebuilt certain part of its works at cost of Rs. 15,00,000.

The original cost of part superseded was Rs. 7,50,000. Old material of Rs. 50,000 is used in new works which is not included in new cost of Rs. 15,00,000. Scrap of old material is sold for Rs. 25,000. At present, the cost of material, labour and misc. exp. Is 5%, 10% and 15% more than that of past respectively. Proportion of material, labour and misc. exp. is 3 : 2 : 1. To meet the increasing demand of gas, an extention of works by 1/3 of its present capacity is decided at cost of Rs. 2,00,000. Classify expenditure into revenue and capital expenditure. Prepare Replacement A/c and new factory A/c and also write journal entries. (20 Marks)

Q.4 (a) Component X and Component Y are used in production of one item as under :
(15 Marks) Average usage per week : Minimum usage per week : Maximum usage per week : 150 nos. 75 nos. 225 nos.

Ordering quantity : Component X : 900 units Component Y : 1500 units Delivery time : Component X : 4 to 6 weeks Component Y : 2 to 4 weeks Find out for both components : 1. Ordering level 2. Minimum level 3. Maximum level 4. Safety level

(b) Find Economic Order Quantity from the following Particulars :

Annual consumption 5000 tons Cost of placing order Rs. 1200 Carrying cost 20% Price per ton Rs. 1500.

(5 Marks)

OR Q.4 (a) Following Particulars are available in respect of manufacturing concern :

( 10 Marks) 1. 2. 3. 4. 5. Annual consumption requirement per year : 3200 units Price per unit Rs. 8 Carrying cost per unit Rs. 4 Cost of placing an order Rs.400. Alternative order sizes in units : 3200 units, 1600 units, 800 units, 400 units and 200 units. Determine the economic order quantity with Trial & Error approach.

(b) From the given data, find out weather the company should seek the discount or not :
(10 Marks) Annual requirement 6000 units Price per unit Rs. 100 Fixed cost per order Rs 400 Carrying cost 20% Assume that the Supplier offers 5% discount if the order size is 1000 units.

Q.5 Write Short Notes : ( Any Four)

i. ABC System of Inventory.

(20 Marks)

ii.
iii. iv. v. vi.

Motives for holding Cash. Principles of Working Capital Management. Explain : Financial lease & Operating lease. Explain : Sale and lease back concept. Advantages of leasing.