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Bac101:Fundamentals Of Accounting Ii Question Paper
Bac101:Fundamentals Of Accounting Ii
Course:Bachelor Of Commerce
Institution: Kenyatta University question papers
Exam Year:2011
ATE: Thursday 7th July 2011 TIME: 8.00am – 10.00a.m
INSTRUCTIONS: Answer ALL the questions.
Question 1
The authorized capital of New Net Company Ltd is shs. 1,500,000, consisting of 50,000
6% preference shares and 100,000 ordinary shares of sh. 10 each. 50% of these have
been issued and fully paid. Directors of the company decided to issue for public
subscription, 30% of each category of shares and another 1000 5% debentures of sh. 100
each payable.
Shares
shs. 3 per share on application
shs. 2 per share on allotment
shs. 5 per share on final call
Debenture
shs. 20 per share on application
shs. 80 per share on allotment
One member holding 10,000 shares failed to pay allotment and final call amounts. The
shares were forfeited and subsequently re-issued at a price of sh. 9 as fully paid
Required:
Show the relevant ledger account to record the above arrangement and an extract of the
balance sheet after the issue.
[30marks]
Page 1 of 3
Question 2
The following information was extracted from the books of Athusi Ltd. The firm does
not maintain records using double entry system of book-keeping.
30 April 2005
30 April 2006
Shs.
Shs.
Balance of debtors
9,000
12,500
Stock
4,900
6,600
Furniture
500
750
Creditor
3,000
2,250
Analysis of other transactions revealed the following information.
Shs.
Cash collection from debtors
30,400
Payments of creditors
22,000
Salaries and wages
6,000
Rent
750
Office Expenses
900
Drawings
1,500
Fresh capital introduced
1,000
Cash sales
750
Cash purchases
2,500
Discounts received
350
Discounts allowed
150
Returns in
500
Returns out
400
Bad debts
100
Cash balance at the beginning was shs 2,500
Required:
Prepare a trading and profit and loss account for Athusi Ltd for the period ended 30 April
2006.
[20marks]
Question Three
Birundu and Yego are partners sharing profits and losses in the ration of 3:2 respectively.
Page 2 of 3
The following represented their balance sheet at 31 December, 2005.
shs
Plant and machinery
1,800,000
Goodwill
2,000.000
Stock
1,960,000
Debtors
2,130,000
Cash at bank
90,00
7,980,00
Capital: Birundu
4,000,000
Yego
3,000,00
Creditors
980,000
7,980,00
On January 1, they decided to admit Muturi into the firm for shs. 2,000,000 capital on the
condition that plant and machinery was to be shs. 2,000,000 and stock shs. 1,9000,000.
Goodwill was to be written off completely.
Required:
i)
Journal Entries to record the changes
ii)
Balance sheet after the admission.
[20marks]
Question Four
a)
Explain what is meant by the terms ‘Mark up and Margin’.
[5marks]
b)
A business has a rate of turnover of 7 times. At one time, it had an average stock
of shs. 142,000. The trade discounts allowed (i.e. margin) is 331/3 % of all selling
prices to retailers of gross profit.
Calculate:
i)
Cost of goods sold
ii)
Gross profit
iii)
Turnover
iv)
Total expenses
v)
Net profit
[15marks]
Best of luck
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