Get premium membership and access revision papers, questions with answers as well as video lessons.
Got a question or eager to learn? Discover limitless learning on WhatsApp now -
Start Now!
Advanced Accounting I (Evening) Question Paper
Advanced Accounting I (Evening)
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2010
UNIVERSITY EXAMINATIONS: 2009/2010
SECOND YEAR STAGE 3 EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CAA 202: ADVANCED ACCOUNTING I (EVENING)
DATE: APRIL 2010 TIME: 2 HOURS
INSTRUCTIONS: Answer ALL Questions
QUESTION ONE
a) Explain the three methods of valuing goodwill when there is change in partnership ( 9Marks)
b) On 31st December 2009, the condensed balance sheet of the partnership of T, D and H who
share profits and losses in the ration of 5:3: 2 respectively was as follows:-
T, D AND H
BALANCE SHEET AS AT 31ST DECEMBER 2009
SHS CAPITAL SHS
Property 42,000 T 7,000
Good will 3,000 D 14,000
Bank 5,000 H 18,000
Trade creditors 11,000
______ _____
50,000 50,000
2
The partners decided to dissolve the partnership on 1st January 2010. The assets were to be realized and
the net proceeds distributed among the partners in such away that no partner would find it necessary to
repay any amount he has already received.
Realization of assets Carrying amount Proceeds
February 2010 13,000 9,000
March 2010 29,000 33,000
Required
Prepare a columnar statement showing the distribution of cash among the partners as well as their
capital accounts, for the period 1st January 2010 to 31st March 2010 according to loss absorption
capacity method. (16Marks)
(Total 25Marks)
QUESTION TWO
The following information relates to the head office and the branch of Mombasa.
Transactions for the year ended 31st December 2008.
Shs.
Cash sales deposited in Bank) 17,918
Goods sent to branch (selling Price) 18,750
Returns to head office (selling price) 186
Sunday expenses paid by head office 4,760
Additional information
a) All purchases are made by head
Office and all goods required by the branch are applied by head office at selling price, that is cost
plus 50%.
b) A burglary took place during the year and SHS 55 in cash (cash sales) and goods to the value of
SHS36 (selling price) were stolen but no entries were made in the books.
c) The net proceeds of the annual sales amounted to SHS 360. All goods were sold at selling price
costs less 10% and no entries were made in the books concerning this price reduction.
d) oods invoiced to the branch at SHS 75 (included in the amount of SHS 18,750 above) were still in
transit at 31st December 2008
3
e) (Inventory
SHS
31st December 2007 1,500
31st December 2008 1,950
Required
(a) Branch inventory Account (10Marks)
(b) Goods to branch Account (2Marks)
(c) Branch adjustments Account (8Marks)
(d) Branch Expenditure Account (5Marks)
[Total 25Marks]
QUESTION THREE
(a) Distinguish between Acquisition and Merger Accounting methods (6Marks)
(b) State the reasons for business combination (6Marks)
(c) Land Ltd acquired 15,000 ordinary shares in National Ltd on 18th June 2008. The balance sheets of
the two companies on 31st June 2009 were as follows:
Land Ltd National Ltd
SHS SHS
Fixed Assets:
Land & Building 100 -
Plant 14 14
Investment:
15,000 shares in
National Ltd 25 -
Current Assets 61 18
___ ___
200 32
Share capital:
150,000, $ 1 share 150 20
4
General reserve 18 -
Profit and loss 3.6 4
Creditors 28.4 8
____ ___
200.0 32
Required
Consolidated Balance sheet as at 31st may 2009 (13Marks)
[Total 25Marks]
QUESTION FOUR
a) Explain the difference between the statement of affairs and the balance sheet as applied in
bankruptcy Accounts. (10Marks)
b) Henry Kuloba died on 1st January 2006 and by his will, he left his house to his wife for her life, and
on her death, to his eldest son wekesa absolutely. He left the residue on his estate to be held on
trust for the benefit of his wife for her life, and on her death, to be shared amongst his other
children, Wanyama, Wafula, Nasimiyu and Nyongesa. His will gave no directions as to the
investment of trust funds.
On 1st January 2006, his house was valued at SHS 1,300,000. He had 10,000shares in East African
Breweries Ltd value at SHS 42 – 48 and SHS 500,000, nominal 12% Kenya Government stock valued
at 90 – 92 and SHS 250,000 in the bank. His debts and funeral expenses amounted to SHS 30,000.
On 1st July 2006, East Africa Breweries Ltd shares were quoted at 48 – 50 and the 12% Kenya
Government stock quoted at SHS 88 – 92.
Required
Estate Capital Account and Balance sheet as at 1st July 2006. (15Marks)
[Total 25Marks]
More Question Papers
Popular Exams
Return to Question Papers