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Specialised Accounting Techniques Question Paper
Specialised Accounting Techniques
Course:Bachelor Of Commerce
Institution: Kca University question papers
Exam Year:2010
UNIVERSITY EXAMINATIONS: 2009/2010
THIRD YEAR EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
CAA 304-A: SPECIALISED ACCOUNTING TECHNIQUES (SATURDAY)
DATE: AUGUST 2010 TIME: 2 HOURS
INSTRUCTIONS: Answer ALL questions
QUESTION ONE
On 1st January 2010, Beta Ltd purchased a truck on hire purchase for Kshs 1,000,000 being payable on
delivery and the balance in 3 installments of Kshs 450,000 each annually. The cash price is Kshs 2.3
million. The asset was depreciated at the rate of 10%.
Required
a) Necessary ledger accounts in the books of the buyer considering the straight line &
method of apportioning interest. (7 Marks)
b) Necessary books of account in the books of the seller considering the straight line
method of apportioning interest. (7 Marks)
c) Repeat part (a) using the interest suspense method (6 Marks)
QUESTION TWO
Betadine Company of Nbi sent on consignment account goods to Referendum company of Mombasa at
an invoice price of Kshs 29,675 and paid freight of Kshs 762, cartage of Kshs 232, insurance Kshs
700. Half of the goods were sold by agents for Kshs 17,500, subject to the agents’ commission of Kshs
875, storage expenses of Kshs 200 and other selling expenses of Kshs350. One fourth of the
consignment was lost by fire and a claim of Kshs 5,000 was recovered.
Required
a) The necessary accounts in the books of Betadine Company and ascertain the profit or loss
made on consignment. (15 Marks)
2
Note- The consignor received a two months bill of exchange from the agents in satisfaction of the
dues.
QUESTION THREE
Moi and Kibaki doing business separately as building contractors, undertake jointly to construct a
building in Juba for a newly started joint stock company for a contract price of Kshs 100,000 payable
as to Kshs 80,000 by installment in cash and Kshs 20,000 in fully paid shares of the company. A bank
account opened in their joint names, Moi paying in Kshs 50,000 and Kibaki Kshs 25,000. They are to
share profit or loss in the proportion of 2/3 and 1/3 respectively. Their transactions were as follows:
Kshs
i.) Paid wages 30,000
ii.) Bought materials 40,000
iii.) Materials supplied by Moi from his stock 5,000
iv.) Materials supplied by Kibaki from his stock 4,000
v.) Architect’s fees paid by Moi 2,000
The contract was completed and price duly received. The jont venture was closed by Moi taking up
all the shares of the company at an agreed valuation of Kshs 16,000.
Required
a) Prepare the joint venture account, showing profit or loss, and the accounts of Moi and Kibaki
showing the final contribution (15 Marks)
QUESTION FOUR
Simon owed money to Ben and hence accepted two bills each of Kshs 5,000 at three months’ duration
drawn on him by the latter on January 2009. Ben discounted one of the bills with his bank for net
proceeds of Kshs 4,800 and endorsed the other in favor of Mukesh to whom he owed a like sum, on the
same date. Simon paid the bill held by Ben on the due date, but failed to meet the bill presented by the
bank. The bank debited Ben’s account on April 4th 2009, inclusive of bank charges of Kshs 10. Simon
paid the amount inclusive of charges to Ben on April 10th 2009.
Required
a) Show the journal entries in respect of the above in the books of Simon and Ben (20 Marks)
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