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!
Bust 211: Intermediate Financial Accounting I Question Paper
Bust 211: Intermediate Financial Accounting I
Course:Bachelor Of Education Arts
Institution: Chuka University question papers
Exam Year:2013
CHUKA
UNIVERSITY
UNIVERSITY EXAMINATIONS
SECOND YEAR EXAMINATIONS FOR THE AWARD OF DEGRE IN BACHELOR OF EDUCATION (ARTS)
BUST 211: INTERMEDIATE FINANCIAL ACCOUNTING I
STREAMS: ANHE Y1S2 TIME: 2 HOURS
DAY/DATE: WEDNESDAY 17/4/2013 11.30 AM – 1.30 PM
INSTRUCTIONS:
ANSWER ALL QUESTIONS
1. (a) Explain the following terms:
(i) Amortization of good will. [2 Marks]
(ii) Temporary differences and deferred taxes. [4 Marks]
(iii) Authorised share capital. [2 Marks]
(iv) Lower of cost or market value in stock valuation. [2 Marks]
(vi) Accounting treatment of repairs and maintenance as used in plant asset
accounting. [2 Marks]
(b) Chuka traders was listed in the stock exchange on 01/01/2012 and issued 5000 shares @10/= par value. The issue price was Ksh 9 payable 5/= on application, 2/= on allotment (discount on shares recognized) and 2/= on first and final call. All monies were received in good time except a share holder of 200 shares who had failed to pay the money on 1st and final call.
Required:
(i) Show the transactions in journal entries.
(ii) Balance sheet extract. [5 Marks]
(c) The following are transactions involving inventories of XYZ Ltd in the month of June 2012.
June I – Balance of 400 units @Ksh 10
June 10 – Sales of 350 units @ Ksh 31
June 12 – Purchase of 700 units @Ksh 12
June 20 – Sales of 540 units @ Ksh 28
June 30 – Purchase of 400 units @Ksh 11
Required:
Determine the value of closing stock and cost of goods sold using Lifo method. [4 Marks]
(d) On 1st January 2000 a company acquired two plants for its manufacturing purposed at 5 million each. The company has been depreciating the plants at a rate of 10% reducing balance method. On September 30th, 2002 the company decided to dispose one of the plant and they realized Ksh 1,000,000 from its sale. The company financial year runs from January 1, to December 31st.
Required:
Plant disposal account. [4 Marks]
2. Mr. Dinesh, a trader, does not keep his books on double entry basis. The following
information is available from his books and other records for the year ended 31st March 1999. On the basis of the information, compile a trading account and profit loss account for the year ended 31st March 1999.
(I) 31/3/1998 31/3/1999
Liabilities and Assets 20000 9400
Bank Balance 3000 2000
Prepaid expenses 5000 7000
Stock 70000 60000
Debtors from sales 230000
Furniture at Book value 70000 82000
Creditors for purchase 220000 260000
Outstanding liabilities for expenses 30000 15000
(II) Receipts and payments during 1998 - 1999
Collection from debtors (after allowing 2 1/2% discount)
Proprietors drawings
Capital introduced by proprietor
Purchases of furniture
14% government securities purchased at 96 % on 1-4-1998
Expenses
Sale of scrap
Payment to creditors (after receiving 2% discount)
Proceeds of bills receivable discounted at 2% 585000
50000
95150
20000
96000
200000
5000
392000
61250
(III) Sales are made so as to realize a profit of 33 1/3% on sale proceeds.
(IV) Goods worth 5000 were taken by the proprietor.
(VI) During the year, bills receivable worth Ksh 150,000 were drawn on debtors, of these, bills amounting to Ksh.30000 were endorsed in favour of creditors. Of these later amount, a bill for Ksh 5000 was dishonoured by the debtor.
(VI) Sales and purchases are made only on credit. [15 Marks]
3. P, Q and P carrying on business s as merchants and sharing profits and losses in the ratio of 2:2:1 dissolved their firm as on December 31,1996 on which date their balance sheet was as follows:-
Sundry creditors 20300 Cash at bank 4500
Reserve fund 10000 Stock 16000
Joint life policy 8000 Debtors 10000
Capital account: less 500
P: 15000 Provision
Q: 15000 Joint life policy 11000
R: 3000 33000 Premises 30000
71300
===== 71300
=====
There is a bill for 1000 under discount. The bill was received from Z. The assets except cash at bank and joint life policy were sold to a company which paid Ksh. 65000 in cash. The life policy was surrendered and Ksh. 11300 were received. Z proved insolvent and a dividend of 50% was received from his estate. Sundry creditors were paid Ksh. 19500 in full settlement. Expenses amounted to Ksh. 3000.
Required:
Prepare Realisation Account, cash account and the partners Capital Account.
[15 Marks
4. Venue Limited is a company that operates in the electronics industry. The following list of balances has been extracted from its financial records for the year ended 30th September 2012.
(‘000’)
Ordinary share capital as at 1st October 2011 20000
10% debentures 10000
Retained profits as at 1st October 2011 2500
Revaluation reserve as at 1st October 2011 2000
Share premium as at 1st October 2011 400
Revenue 40000
Cost of sales 15000
Distribution costs 10000
Administrative expenses 8000
Additional information:
1. A new issue of 500,000 ordinary shares was made at a price of Ksh.15 per share. The par value of the company’s shares is Ksh.10 per share.
2. Land and building were revalued at a gain of Ksh. 500,000.
3. Dividends amounting to Ksh.2000000 were paid during the year.
4. Corporation tax for the year amounted to Ksh.2000000.
Required:
Prepare comprehensive income statement and statement of changes in Equity for the year ended 30th September 2012 for publication. [15 Marks]
---------------------------------------------------------------------------------------------------------------------
More Question Papers
Popular Exams
Return to Question Papers