BBS-First-Year-Financial-Accounting-and-Analysis-MGT211-Model-Question-2020-TU-SetA-Download-PDF
TRIBHUVAN UNIVERSITY
Faculty Of Management
Office Of The Dean
BBS / 4 Years Programme / First year / MGMT
Financial Accounting and Analysis ( MGT 211 )
Full Marks :100
Pass Marks : 35
Time : 3 hrs.
MODEL QUESTION – 2020
Set - A
Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks.

Brief Answer Questions. (10X2=20)

1. What is business entity concept of accounting?

4. Write down the meaning of contingent liabilities.

5. What is long lived assets?

6. On January 1, Simran Company borrowed Rs. 100,000 from bank by signing a 3-month, 12% notes payable. It paid the principal and interest at due date.
Required: Journal entries for issue and retirement of note.

7. You are provided the following information.
Sales = Rs.300,000
Wages to workers = Rs.50,000
Interest received = Rs.10,000
Income tax paid = Rs.5,000
Cost of bought in materials and services = Rs.180,000
Opening Stock = Rs.20,000
Closing Stock = Rs.30,000
Required: Amount of value added.

8. The following information are given:
  • Started business with cash of Rs.80,000
  • Paid rent Rs.13,000 including advance rent of Rs.1,000
  • Salary paid Rs.16,000 and outstanding salary was Rs.2,000
Required: Accounting equation

9. The following transactions of the Light Company are given below:
Jestha 5       Returned by Rama Lights
                     20 Fans @ Rs.1,500 each
                     2 dozen Lamps @ Rs.900 each
                     Carriage charge Rs.1,000
                     Less: Trade discount 10%
Jestha 17     Returned 8 Heaters from KK Lights for Rs.20,000
Jestha 29     Returned 300 Led Lights to Divya Lights Rs.30,000
Required:    Return inward book

10. The following information are given,
Trial Balance
Particulars Debit Credit
Sundry Debtors 220,000

 

Bad Debts 20,000

 

Provision for Doubtful Debts

 

30,000
Adjustment:
  • Additional Bad Debts to be written off Rs.10000
  • New Provision for Doubtful Debts @ 10% on Debtor
Required: Provision for doubtful debt account.

Short Answer Questions (attempt any five) (5X10=50)

11. The following information is provided:
Net Working Capital Rs.600,000 that represents Rs.300,000 inventory value
Current Liabilities Rs.200,000
Capital Employed Rs.1,000,000
Debentures Rs.400,000
Account Receivable Rs.200,000
Operating Profit of the year Rs.100,000 being 10% of Sales
Income Tax is 25%
Required:
a. Net profit after tax
b. Liquid Ratio
c. Debt Equity Ratio
d. Stock Turnover Ratio
e. Average Payable Period
f. Return on Shareholder’s Equity
g. Net Profit Margin (1+6x1.5=10)

12. The ABC Company sells a single product for Rs.2 per unit and uses a periodic inventory system. The following data are available for the year.
Date Transaction Number of Units Unit Cost Rs. Total Rs.
Baisakh 11 Beginning inventory 1,000 1 1,000
Jestha 16 Purchase 700 1.1 770
Shrawan 22 Sale (1,100)

 

 

Kartik 27 Sale (400)

 

 

Poush 13 Purchase 800 1.3 1,040
Falgun 15 Sale (600)

 

 

Required:
a. Cost of goods sold, ending inventory and gross profit under weighted average costing method.
b. Cost of goods sold, ending inventory and gross profit under FIFO method. (5+5=10)

13 a. A firm purchased a machine costing Rs.200,000 on 1st Baishak 2075. The useful life of the machine is 3 years with expected salvage value of Rs.40,000. The firm decided to invest the depreciation amount to earn interest at 5% per annum. The sinking fund table shows that Rs.0.317208 invested at 5% p.a. will give Re. 1 at the end of 3 years. At the end of 3rd year, the investments were sold for Rs. 100,000.
Required: Depreciation Fund Investment Account
b. Explain the concept of accounting standard. Why it is needed? (2+3=5)

14 a. On 1st Baisakh 2075, MG Group Stockholder’ Equity category appeared as follows:
8% Preferred Stock of Rs.500 par value 1,000 shares issued and outstanding 500,000
Common Stock Rs.100 par value 15,000 shares issued and outstanding 1,500,000
Additional paid in capital – Preferred 300,000
Additional paid in capital – Common

400,000

Total contributed capital 2,700,000
Retained Earnings 2,000,000
Total Shareholders’ Equity 4,700,000
The Preferred Stock is non-cumulative and non-participating. During 2075 the following transaction occurred:
a. On 1st Ashwin, declared a cash dividend of Rs.80,000 on preferred stock. Paid the dividend on 1st Kartik.
b. On 1st Mangsir, declared a 10% stock dividend on common stock. The current market price of the common stock was Rs.180. The stock was issued on Poush.
c. On 1st Magh declared a cash dividend of Rs.60 per share on the common stock; paid the dividend on 30th Magh.
d. On 1st Chaitra issued a 2-for-1 stock of common stock, when the stock was selling for Rs.200 per share.

Required: Develop the Stockholders Equity category of the 31st Chaitra 2075 balance sheet.
Assume the net income for the year was Rs.300,000. (5)
b. Explain the concept of bonds and write down the main characteristics of bond. (5)

15. a. Differentiate between horizontal and vertical analysis. (5)
b. Differentiate between account receivable and note receivable (5)

16. Discuss in brief about the disclosures required for financial statement under Nepal Financial
Reporting Standard (NFRS). (10)

Long Answer Questions (attempt any two) (2X15=30)

17. Following are the transaction of a Computer Service Agency during the month of January.
Jan 2 Received cash Rs.300,000 to start business from the owners of the company.
Jan 8 Deposited into bank Rs.100,000
Jan 10 Signed a two year promissory note at the bank and received cash of Rs.50,000.
Interest 10% along with Rs.50,000 will be repaid at the end of two years.
Jan 11 Purchase of supplies for Rs.30,000 on account. The company has 45 days to pay for the supplies.
Jan 19 Billed a client Rs.100,000 for service rendered by expert in helping to install a new computer system. The client is to pay 25% of the bill upon its receipt and the remaining balance within 60 days.
Jan 21 Paid Rs.10,000 to the advertising company.
Jan 22 Received Rs.45,000 after deduction of 10% discount from the client billed on Jan 19
Jan 26 Received cash of Rs.30,000 for service provided in selecting software for its computer.
Jan 28 Purchased a computer system for Rs.50,000 in cash.
Jan 30 Paid Rs.50,000 salaries for January and Rs.30,000 rent for February.

Required:
a. Journal entries (5)
b. T accounts (ledger) for income, account receivable and account payable (3)
c. Triple column cash book (4)
d. Trial Balance (3)

18. The balance sheet of a company for two years are given below:
Liabilities Year 1 Year 2 Assets Year 1 Year 2
Equity Share capital 1,000,000 12,00,000 Fixed assets 1,000,000 1,200,000
Share premium 100,000 120,000 Inventory 200,000 350,000
10% Debentures 120,000 70,000 Accounts receivable 250,000 340,000
Provision for tax 20,000 40,000 Prepaid expenses 20,000 10,000
Provision for dividend 10,000 20,000 Cash 120,000 150,000
Accounts payable 60,000 150,000

 

 

 

Accumulated depreciation 250,000 280,000

 

 

 

Profit and loss a/c 30,000 170,000

 

 

 

 

1,590,000 2,050,000

 

1,590,000 2,050,000

Income Statement for the Year 2

Sales revenue

 

Rs.

Less: Cost of goods sold

 

10,00,000
Gross Profit

 

600,000
Less: Operating expenses:

 

400,000
Administrative expenses 150,000

 

Depreciation 50,000

 

Provision for tax 40,000

 

Provision for dividend 20,000

 

Interest paid 12,000

 

Premium on redemption of debentures 5,000

 

Total operating expenses

 

277,000
Net income

 

123,000
Add: Gain on sale of fixed assets

 

17,000
Retained earning

 

140,000
Additional information
i. A plant costing Rs.50,000 with an accumulated depreciation of Rs.20,000 has been sold
for Rs.47,000.

ii. Dividend paid in year 2 Rs. 10,000.
Required: Cash flow statement by using direct method (6+3+3+3=15)

19. “Financial accounting is based on generally accepted accounting principles, which is enabled the preparation and presentation of financial statement uniformly,” discuss. (15)
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