Bharathiar University 2007 B.Com Advanced Accounting - Question Paper

(Or)

(b) A company has acquired a lease of a cinema building for a term of five years by payment of Rs.4,00,000. It is proposed to depreciate the lease by the annuity method, charging 5% per annum. Show ledger account of asset during the period of the lease. Reference to the annuity table showing that the amount for Re.1 for five years at 5% is Re.0.230975.

25. (a) A and B are partners in a business with capital of Rs.30000 and Rs.10000 respectively. On first January 1995 the Trading profit (before taking into account provision of the deed) for the year 1994 was Rs.12000. Interest on capital is to be allowed at 5% p.a. B is entitled to salary of Rs.3150. The drawings of the partners were Rs.3000 and Rs.2000 the interest for A being Rs.100 and for B Rs.50. prepare P & L appropriation account.

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(b) A,B and C are in partnership as from first January 1994, sharing profits and losses in the proportions of 4,3 and 1. They contribute Rs.5,000, Rs.3000 and Rs.2,000 respectively as capital and during the year draw an account of profits Rs.7000, Rs.5,000 and Rs.1,500. Interest on capital is 5%. Before providing for interest, the P& L account indicates a credit balance of Rs.24,000. Out of this, they agree that Rs.1,500 shall be set aside against the cost of a pending lawsuit. Show the P& L appropriation account and partners capital account.



part –C
26. (a) Enumerate the methods of calculating Depreciation. explain briefly the merits and limitations of these methods.
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(b) What do you understand by “Self-balancing system of ledger”? State the advantages of this system.

27. (a) X and Co. of Chennai have a branch at Touchy. Goods are sent by the head office at invoice price, which is at a profit of 20% on invoice price. The head office pays all expenses of the branch. From the subsequent particulars, prepare branch account in the head office books when goods are shown at invoice price:


Opening balances:
Stock at invoice price 11,000
Petty cash 100
Expenses made by H.O.:
Rent 600
Wages 200
Salary, ect 900
Remittances made to H.O.:

Earning:   Approval pending.