B.B.S.(4YRS.)/THIRD YEAR/ MGMT
Financial Accounting and Analysis [MGT-211]
Full marks: 100
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
Attempt ALL Questions [10×2-20]
1. What is business entity concept of accounting?
2. Write about the cash basis of accounting.
3 What are the importance of internal control to a business?
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
Wages to workers Rs.50,000
Sales = Rs.300,000 Income tax paid Rs.5,000
Interest received = Rs.10,000
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:
|Provision for Doubtful Debts||–||30000|
- Additional bad debts to be written off Rs.10,000
- New provision for doubtful debts @ 10% on debtor Required: Provision for doubtful debt account
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Descriptive Answer Questions: [5×10-50]
Attempt FIVE Questions
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%
a Net profit after tax
b. Liquid ratio
C. Debt equity ratio
d. Stock turnover ratio
e. Average payable period
f. Return on shareholders equity
g. Net profit margin
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||Units of cost||Toatl|
|baisakh 11||beginning inventory||100||1||100|
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
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 is it needed?
14 On 1 st baisakh 2075, MG Group stockholder equity category appeared as follows:
|8% preferred stock of RS 500 par value 1000 share issued and outstanding||500000|
|common stock RS 100 Par value 15000 shares issused and outstanding||1500000|
|Additional paid in capital preferred||300000|
|Additional paid in capital common||400000|
|Total contributed capital||2700000|
|Total shareholders equity||4700000|
The preferred stock is non cumulative and non participating .During 2075 the following transaction occurred
a. On 1st Ashwin declared a cash of RS 80000 ON preferred stock. Paid the dividend on 1s” Kartik. referred stock. Paid the dividend on 1st kartik
b On 1st mangsir declared 1 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 30h Magh
d. On 1st Chaitra issued a 2-for-1 stock split of common stock, when the stock was sellingfor 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
b Explain the concept of bonds and write down the main characteristics of bond.
15. a. Differentiate between horizontal and vertical analysis.
b. Differentiate between account receivable and note receivable
16. Discuss in brief about the disclosures required for financial statement under Nepal Financial Reporting Standard (NFRS).
Analytical Answer Questions [2×15-30
Attempt any TWO Questions
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 pf supplies for Rs.30,000 on account. The company has 45 days to pay for the supplies.
*Jan 19 Billed a cljent 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.
a. Journal entries
b. T accounts (ledger) for income, account receivable and account payable
C. Trpple column cash book
d. Trial balance
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||1000000||1200000||Fixed assets||1000000||1200000|
|10% debenture||120000||70000||Account receivable||250000||340000|
|provision for tax||20000||40000||prepaid expenses||20000||10000|
|provision for dividend||10000||20000||cash||120000||150000|
|Profit and Loss a/c||30000||170000|
Income Statement for the year 2
|less:cost of good sold||600000|
|less :operating expenses|
|provision for tax||40000|
|provision for dividend||20000|
|premium on redemption of debentures||5000|
|total operating expenses||277000|
|add: gain on sale of fixed assess||17000|
i. A plant costing Rs.50,000 with an accumulated depreciation of Rs.20,000 has been sold for Rs.47,000.
i. Dividend paid in year 2 Rs. 10,000.