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Acct 411: Advanced Financial Accounting Question Paper
Acct 411: Advanced Financial Accounting
Course:Bachelor Of Commerce
Institution: Kabarak University question papers
Exam Year:2010
INSTRUCTIONS
1. Answer Question ONE and ANY OTHER TWO questions.
2. Show your working where necessary. F
QUESTION 1
a) Identify circumstance leading to dissolutions of partnership kind of business. (5 marks)
b) Good max Ltd company has its H.O Office in south Africa with several branches in
Kenya, India, Uganda and Tanzania. On 31st December 2009, the following balances
appeared in the books of Good max Ltd branch located in India.
Item Dr. Cr.
Rs. (Rupees) Rs.
Stock on 1/1/2009 37,800 -
Purchases and Sale 225,000 337,500
Debtor and Creditors 117,000 78,000
Bills Receivable/payables 31,20 27,300
Wages and Salaries 14,400 -
Rents, Rates and Taxes 10,800 -
Sundry Charges 4,500 -
Furniture & Fixture 14,730 -
Banic balance 86,970 -
South Africa (H.O) Office - 99,600
542,400
542,400
Additional information
1. Stock on 31/12/2009 was Rs 32,500. Good max branch Account in the books of H.O in
South Africa showed a debit balance of S.A.Rand 7740 on 31/12/2009.
2. Furniture and fixture were acquired from a remittance from South Africa at SA. Rand. 1050
which exactly cover the cost of such fixtures.
3. The rate of exchange was taken as follows;
Date Rate
31/12/2008 Rs. 42 per SA Rand
31/12/2009 Rs. 39 per SA Rand
Required
(i) Prepare converted trial balance in the books of South Africa office. (6 marks)
(ii) Prepare Income statement for the year ended 31st December 2009 in the books of S.
Africa office.
(7 marks)
(iii) Prepare the balance sheet relating to good max ltd branch in the books of H.O in S.
Africa. (6 marks)
QUESTION 2
Ms. Jepkoech sold goods to Mr. Boen for Sh. 10,000. Jepkoech on Boen and the bill was duly accepted
by Mr. Boen and returned it to the drawer.
Required
Necessary Journal entries in the books of the two parties under the following circumstances:-
a) On the due date the bill was honored. (6 marks)
b) On the due date when the bill was dishoured. (6 marks)
c) Ms. Jepkoech discounted the bill with her bank for sh. 9800. (8 marks)
QUESTION 3
a) Mohan and Sohan started a business on 1st January 2007 contributing sh.50,000 by Mohan and
sh.40,000 by Sohan. On 30th June 2007 Sohan made a further contribution of sh.10,000 towards his
capital. Drawings during the year by Mohan were sh. 4000 and sh. 5,000 by Sohan. 6% Interest was
to be charged on capital and no interest was to be charged on drawings. Sohan was allowed a Salary
of Sh.500 per month. The profit for the year was sh.32,000 before charging salaries and interests.
Required
(i) Profit and loss Appropriation Account. (4 marks)
(ii) Partners capital Account under fluctuation method. (6 marks)
b) Nakuru Transports Ltd purchased from General motors Ltd three trucks costing
Ksh.4,000,000 each on line purchase system. The down payment made was ksh.3,000,000
and the remainder was to be paid in three equal Installments together with interest at 5%.
Nakuru transporters writes off depreciations at 205 on the reducing balance of the first year
but failed to pay for the rest of the years.
Required
The necessary ledger accounts in the books of Nakuru transporters only. (10 marks)
QUESTION 4
a) Identify six steps used in computation of insurance claims. (6
marks)
b) From the following information given, prepare a value added statement. (14
marks)
Ksh.
Salaries, wages and Retirement benefits 127,000
Dividend to ordinary shareholder 9,00
Turnover 785,000
Interest on the borrowed money 13,000
Exercise and custom duties paid to the government 195,000
Depreciation of fixed Assets 18,000
Investment Income 8,000
Cost of raw materials 396,000
Corporation tax 16,000
Outside Shareholders Interest in Subsidiary 5,000
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