BBS First Year Financial Accounting and Analysis | MGT211 | Model Question 2020 | TU | Set B | Download in 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 - B

Candidates are required to give their answers in their own words as far as practicable. The figures in the margin indicate full marks.

Check:

Complete Syllabus of Business Statistics | MGT 202 | BBS 1st year (4 Years).

Section A

Brief Answer Questions. (10X2=20)

1. What is financial accounting?

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2. What is accrual concept of accounting?

3. Write about the perpetual system of inventory.

4. Write any two differences between stock dividend and stock splits.

5. What is matching concept of accounting?

6. An enterprise has total assets of Rs. 500,000 and liabilities of Rs. 300,000 at the beginning of the year. During the year, the company earned Rs. 200,000 and distributed Rs. 50,000 dividend.
Required: Equity at the end of the year

7. The following transactions of the company are given below:
Jestha 2 Acceptance was given to Hari for 3 months for Rs.30,000
Ashad 9 Received from Rajendra an acceptance for 1 month for Rs.8,000
Ashad 27 Discounted Rajendra’s acceptance for Rs.7,900
Shrawan 25 Acceptance was given to Ram for 2 months for Rs.22,000
Required: Bills Payable Book

8. ABC Company receives a one year loan from Nepal Bank Ltd. On 1st Shrawan 2075. The face value of the Note of Rs.100,000 must be repaid on 31st Ashad 2076 along with 12% interest.
Required: Journal entries to record the loan and its repayment.

9. Pashupati Company redeemed Rs. 100,000 face value bond issued at premium Rs. 10,000. The unamortized premium was Rs. 6,000 and the bond contains a call provision of Rs. 103.
Required: Gain or loss on early redemption of bond.

10. Following information are given to you:
Insurance expenses Rs.10,000
Salary Rs.12,000
Commission received Rs.5,000
Interest (Cr.) Rs.7,000
Utilities Rs.8,000
Depreciation Rs.10,000
Supplies expenses Rs.4,000
Required: Closing entries

Section B

Short Answer Questions (5x10=50)

Attempt any FIVE Questions [5x10=50]

11. On 31st Chaitra 2075 Bank Statement of Citi College disclosed a balance of Rs.12,400 and Cash Book showed the balance of Rs.12,500

a. Number of cheques were deposited in the bank but on 31st Chaitra, 2075, a cheque for Rs.2,000 was not credited in the Bank Statement.

b. Cheques issued of Rs.6,000 but only Rs.2,000 presented before 31st Chaitra.

c. Notes receivable collected by the bank Rs.1,500

d. Cash of Rs.4,800 deposited by the college on Chaitra was recorded by the bank as Rs.4,200.

e. A cheque for Rs.3,000 received from a student was returned by the bank due to insufficient fund with the bank.

Required:

i. Journal entries

ii. Bank Reconciliation Statement as on 31st Chaitra 2075

iii. Bank balance on 31st Chaitra balance sheet. (4+5+1=10)

12. Alpha Enterprises provides you the following information related to the inventories for April 2019. Alpha makes counting and recording of inventories items only at end of each month.

April 1 Beginning inventory 600 units @ Rs10 each

April 5 Purchased 800 units @ Rs.11 each

April 12 Purchased 1,200 units @ Rs.12 each

April 19 Sold 1,000 units @ 18 each

April 23 Purchased 600 units @ Rs.12 each

April 26 Purchased 220 units @ Rs.15 each
April 30 Sold 1.200 units @ Rs.20 each
Required:
(a) What inventory system the Alpha is adopting? (2)
(b) Ending inventory and cost of goods sold under the LIFO method assuming a periodic inventory system. (6)
(c) Income statement showing net income, assume depreciation expenses Rs. 8,000 and other operating expenses Rs. 12,000. (2)

13. a. ABC Company bought a machine, expected to render 72,000 hours of service for Rs.380,000. Its transportation and installation cost are 10,000 each with salvage value of Rs.40,000. It has been estimated that the time requires for manufacturing a finished product is 2 machine hour per unit.

During first 3 years, the company manufactured the goods as under

Year	1	2	3
Output in units	9,000	10,000	11,000

Required: Machinery account for 3 years. (5)
b. Differentiate between accounting and accountancy. (5)

14 a. During the year of 2075, XYZ Company made total sales of Rs.12,00,000 of which 70% are on credit. Company collected cash of Rs.768,000 from the open account in that year. In the year 2075 it has also wrote off Rs.20,000 as an uncollectible account.
The following are balance of accounts at the end of 2074.

Account Receivables	Rs.200,000
Allowance for doubtful debt	Rs.18,000

Company past performance shows that 5% of its ending balance of account receivable is
expected to be doubtful debt account.
Required:

• a. Journal entries for sales, collection and write-off of uncollectable accounts
• b. Estimated bad debt for 2075 based on the percentage on account receivable. Also, journalize it. (3+2=5)

b. Differentiate between capital and revenue expenditure. (5)

15. “A lease is a legal contract under which one party agrees to pay rent properly owned by other party”, discuss. (10)

16. Explain the meaning of the source of documents. Also, write down the importance of source of documents. (5+5=10)

Section C

Long Answer Questions (attempt any two) (2x15=30)

17. The ABC Company’s Statement of Profit and Loss a/c and Statement of Financial Position for two years have been given below:

Statement of Profit and Loss a/c for the year 2075
Particulars	Amount (Rs.)
Sales (Including Rs.800,000 credit sales)	15,00,000
Less: Cost of goods sold	900,000
Gross Profit	600,000
Less: Operating Expenses
Depreciation	300,000
Debenture Premium	20,000
Interest paid	10,000
Other Operating Expenses	150,000
Net Income before other income	120,000
Add: Profit from sale of fixed assets (book value Rs.40,000)	20,000
Net profit	140,000

Statement of Financial Position of a company for 2074 and 2075
Capital & Liabilities	2074	2075
Share Capital @ Rs.100 per share	1,200,000	1,500,000
Share Premium	120,000	150,000
General Reserve	40,000	60,000
10% Debenture	200,000	100,000
Account Payable	160,000	240,000
Bank Overdraft	230,000	160,000
Retained Earnings	150,000	290,000
Total	2,100,000	2,500,000
Assets
Fixed Assets	1,500,000	2,000,000
Investment	100,000	200,000
Inventories	50,000	100,000
Account Receivable	235,000	90,000
Cash	200,000	100,000
Preliminary expenses	15,000	10,000
Total	2,100,000	2,500,000

Required for 2075:
a. Current Ratio b. Quick Ratio
c. Debt to Total Capital Ratio

d. Inventory Turnover Ratio
e. Total Assets Turnover Ratio

f. Net Profit Ratio
g. Return on Equity

h. Return on Investment
i. Interest Coverage Ratio

j. Account Receivable Turnover Ratio (10x1.5=15)

18. An unadjusted trial balance of a company are given below.

Particulars	Debit (Rs.)	Credit (Rs.)
Cash	300,000
Bank	350,000
Discount Allowed	5,000
Furniture	200,000
Purchases	200,000
Debtors	80,000
Interest on loan	7,000
Salary	60,000
Rent	52,000
Capital		600,000
Creditors		45,000
Discount Received		10,000
Sales		500,000
12% Bank Loan		100,000
	1,255,000	1,255,000

Adjustment:
a. Closing stock Rs.50,000
b. Prepaid rent was Rs.4,000
c. Outstanding interest on bank loan was Rs.5,000
d. Depreciation on furniture at 25% per annum
Required:
i. Adjusted Trail Balance (2)
ii. Statement of Profit and Loss a/c as per NFRS (4)
iii. Statement of Financial Position as per NFRS (4)
iv. Statement of Cash flow Statement as per NFRS (5)

19. a. Who are the external users of accounting information? Why do they need such information? (8)
b. Explain about the value added statement with its advantages. (7)

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