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Fundamentals Of Accounting 11 Question Paper
Fundamentals Of Accounting 11
Course:Commerce
Institution: Kenyatta University question papers
Exam Year:2009
KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2008/2009
SECOND SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
BAC 101: FUNDAMENTALS OF ACCOUNTING II
DATE: MONDAY 14THSEPTEMBER 2009
====================================
INSTRUCTIONS
I . Answer ALL the Questions
2. Marks allocated to each question are indicated at the end of every question
3. Show your working logically.
QUESTION ONE
The treasurer of a Junior Sports Club had produced the following receipts and payments
account for the year ended 31st December, 2007.
Receipts: shs.
Bank balance Jan. 1, 2007 1298
Subscriptions received 3790
Dances and profits 186
Profits on sports exhibitions 112
Coffee bar takings 2798
Sale of equipment 66
TOTALS 8250
Payments: Sh
Coffee Supplies 1456
•Wages of attendants and cleaners 1776
Rent of apartments 887
A new equipment bought 565
Travelling expenses for team 673
Balance at bank at 31 December 2007 2893
TOTALS 8250
Additional information
1) Stocks on January 1, 2009 Shs.
Coffee bar 59
Clubs equipment 2788
2) The figure for equipment includes an amount of shs. 77, for equipment sold for shs.
66 during the year.
3) Depreciation for the year is to be shs. 279. This is in addition to loss on equipment
sold during the year.
4) Subscription owing were shs.29 at December 31,2007.
5) Charge sh. 650 for wages to bar trading account.
Required
a) Draw up the coffee bar trading account for the year. (5 marks)
b) Calculate the accumulated fund at January, 2007. (5 marks)
c) Draw up the income and expenditure account for the period and the clubs balance
sheet at 31 st December, 2007. (15 marks)
QUESTION TWO
a) State the rule in Garner Vs Murray. (2 marks)
b) A, Band C were equal partners in a firm. They decided to close their
business when their balance sheet was as indicated:
A, B AND C
Balance Sheet
Assets Shs
Cash 5000
C's overdraft 1200
Deficiency 3024
TOTALS 9224
Capital:
A 5420
B 3804
TOTALS 9224
C had been proved insolvent and nothing could be realized from him.
i) show the final adjustment between A and B according to the partnership
Account. (10 marks)
ii) How would the results have different if the adjustments were done according
to the rule in Garner Vs Murrary of 1904.
Note: show the accounts in both the cases. (10 marks)
QUESTION THREE
A limited company issued a prospectus offering 20,000 ordinary shares of sh.l 0 each at a
premium of sh. 2 each. The shares money were payable per share as follows:
On application 1.00
On allotment 4.00
On first call 3.00
On final call 4.00
Applications were received for 31,700 shares. The directors allotted the shares as follows.
Shares
a) Allotment in full / two applicants each holding 400
shares paid full 3,800
b) Allotment of 2/3 of shares applied for 16,000
c) Allotment of 1;4 of shares applied for 200
Application money was returned to the applicant for 3, I00 shares to whom the
allotment was made. Cash received in advance for calls was retained until due dates.
The amount due on allotment, first and final calls were received in full except on
500 shares on which amount for final call was not received. The directors forfeited
those shares and re-issued them at sh.8 per share as fully paid up.
Required:
Show the entries necessary to recognize all the transactions,. (16 marks)
QUESTION FOUR
a) Explain the need for account ratios. (4 marks)
b) Explain the relationship between the mark up and a margin giving a suitable
illustrations. (8 marks)
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