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Caa 202 Advanced Acconting 1 Question Paper
Caa 202 Advanced Acconting 1
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2011
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UNIVERSITY EXAMINATIONS: 2011/2012
YEAR 2 EXAMINATION FOR THE BACHELOR OF COMMERCE
CAA 202 ADVANCED ACCONTING 1- (DAY + EVE)
DATE: APRIL 2012 TIME: 2 HOURS
INSTRUCTIONS: Answer ALL Questions
QUESTION ONE
Muthoni, Njeri and Wangeci are in partnership sharing profits and losses in ratio the 2:1:1. The balance
sheet of the firm as at 30 April 1989 was as follows:
Shs Shs Shs Shs
Capital Accounts Fixed assets
Muthoni 360,000 Land and building
Njeri 180,000 at cost 540,000
Wangeci 180,000 720,000 Furniture and
fittings 90,000
Less: Depreciation 30,960 59,040
599,040
Current Liabilities Current assets
Bank overdraft 11,700 Stock 144,000
Creditors 49,500 61,200 Debtors 38,160 182,160
781,200 781,200
On 30 April 1989, it was agreed to dissolve the partnership and as Njeri is continuing in business on her
own account she agrees to take over the furniture and fittings, stocks and debtors at valuations of
Shs.54,000, Sh.180,000, and Sh.36,900 respectively. She also agrees to acquire the land and building at
a cost of Sh.965,000 and obtains a bank loan of Sh.700,000 which is paid to the partnership. The balance
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owing by Njeri is charged against Muthoni's capital account as the two parties have agreed that Njeri will
repay the loan to Muthoni over a period of twenty-four months at an interest rate of 15% p.a. Realisation
expenses amounting to Sh.10,700 are paid in cash and the creditors of the firm are paid in full.
Required:
Prepare the ledger accounts of the partnership in order to close off the books as at 30 April 1989.
(15 marks)
QUESTION TWO
A and B are partners in a business. A runs a head office in Mombasa and B runs a branch in Malindi.
Separate books are maintained for the head office and the branch. Profits and loses are shared equally.
The trial balances as at 30th June 2002 were as follows:
Head Office Branch
Sh Sh Sh Sh
Property plant and equipment (NBV) 760,000 308,000
Stocks at 1 July 2001:
- Head office at cost 560,000
- Branch at transfer price 340,000
Goods sent to branch/from head
office
1,430,800 1,398,800
Debtors 348,960 78,080
Sales 3,880,400 2,388,000
Bank and cash 612,280 115,360
Purchases 3,918,000
Remittances 2,247,600 2,257,200
General expenses 680,000 400,000
Branch current a/c/ Head office
current a/c
2,530,640 2,498,640
Creditors 324,680 10,800
Capital at 1 July 2001 (held equally) 1,492,400
Provision for unearned profit ________ 34,000 _______ _______
9,409,880 9,409,880 4,897,440 4,897,440
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Notes:
a) Mombasa invoices goods to Malindi at cost plus one ninth
b) At 30th June 2002:
• Stocks at head office at cost Sh 508,000
• Stocks at the branch at transfer price Sh 192,000
• Stocks in transit at transfer price Sh 32,000
• Cash in transit to head office Sh 9,600
Required:
a) Prepare an incomes statement for the year ended 30th June 2002 and a statement of financial
position as at that date, separately for (14 marks)
• The head office
• The branch
• The combined entity
b) Post and balance both current accounts. (6 marks)
QUESTION THREE
The following balance sheets relate to H Ltd and S Ltd as at 31 December 2011.
H Ltd S Ltd
Non Current assets shs shs shs shs
Tangible Land 100,000.00
50,000.00
Buildings 150,000.00
80,000.00
Plant 80,000.00
50,000.00
330,000.00
180,000.00
Investment in S Ltd 100,000.00
Current assets
Inventory 60,000.00
40,000.00
Accounts receivables 80,000.00
50,000.00
Cash at
bank 25,000.00 165,000.00
90,000.00
TOTAL ASSETS 595,000.00
270,000.00
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Ordinary Shares of Shs.1 each 200,000.00
100,000.00
Capital Reserves 100,000.00
40,000.00
Retained profits 90,000.00
50,000.00
390,000.00
190,000.00
Non Current liabilities
10% Loan Stock 100,000.00
20,000.00
Current Liabilities
Bank Overdraft -
10,000.00
Accounts payables 80,000.00
30,000.00
Proposed dividends 25,000.00 105,000.00
20,000.00
60,000.00
595,000.00
270,000.00
Additional information
I) H Ltd acquired the investment in S Ltd on 1 Jan 2009 as follows:
SHS
60% Ordinary shares
90,000.00
Loan
Stock
10,000.00
100,000.00
ii) On the date of acquisition the capital reserves of S ltd amounted to Shs.10,000 and retained
profits amounted to Shs. 5,000. On the same date the fair values of land and buildings were
Shs. 10,000 and Shs. 20,000 respectively above the carrying amounts. Although no depreciation
is provided on land , buildings are depreciated at 5% p.a. on cost.
iii) Included in the inventory of H Ltd are goods purchased from S Ltd at a selling price of
Shs.15,000 to S Ltd. S ltd reported a profit of 50% on cost.
iv) Included in the plant of S Ltd is plant bought from H Ltd on 01.01.2010 at a price of
Shs. 20,000. H Ltd reported a profit of a third on cost. The group provides depreciation
on 30% on reducing balance.
v) H Ltd has not yet accounted for it's share of proposed dividends in s Ltd.
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vi) Included in the accounts payable of H Ltd is an amount of Shs. 25,000 due to S Ltd. This
amount stood at Shs. 28,000 in the books of S Ltd. The
difference was due to the following items:
- Cash sent by H Ltd to S Ltd of
Shs.1,000.
- -Goods sent to H Ltd by S Ltd but
not yet received by H Ltd. Selling
price to H Ltd was Shs. 1,200.
- Administration fees of Shs.800
charged by H Ltd to S Ltd but not yet
recorded by S Ltd.
vii) Assume that goodwill on consolidation has been impired by 40%.
Required:
Prepare the consolidated balance sheet of H Ltd and it's subsidiary as at 31.12.2011
(20 marks)
QUESTION FOUR
a) Explain the order of payments in the distribution of bankrupts estate (4 marks)
b) Explain THREE duties of personal representation. (6 marks)
c) In Pension Accounts, the meetings of creditors must be held for what purpose in the course of
a creditors’ voluntary winding up? (5 marks)
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