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Bac 200 Accounting For Assets Question Paper
Bac 200 Accounting For Assets
Course:Bachelor Of Commerce
Institution: Pwani University question papers
Exam Year:2013
PWANI UNIVERSITY
DEGREE OF BACHELOR OF COMMERCE
BAC 200 ACCOUNTING FOR ASSETS
DURATION 3HRS
Attempt question one and any other two questions
question one
i)ABC ltd acquired the rights to mine oil from a stated area of sh 5400 million.The area is estimated to contain 2000million barrels of crude oil.
The estimated residue value of this area is 60million
Required
a)Calculate the depletion of this mine
b)Assume that in the first year of exploration,1000barrels were extracted,what will be the depletion and show how this will be recorded in the books of accounts
c)Show how it will be presented in the balance sheet (10mks)
ii)The following information relates to Supa co.ltd.It controls its petty cashbook by means of an imprest of sh.6000.The following details are available for the month of October,2012
October 2 cash in hand 6000
October 2 traveling expenses 245
October 3 paid carriage charge for goods 780
October 4 bought postage stamps 500
October 4 bought pencils and envelops 48
October 5 paid for window cleaning 432
October 6 bought stamps for circular to customers 210
October 7 office cleaning 600
October 9 agents fares to and from warehouse 840
October 10 bought stationery 225
October 11 donation to harambee 1000
October 12 advertising for vacancy 300
October 13 office cleaning 200
October 14 reimbursement for amount was made
Required
Prepare the company''s petty cash book using four column analysis
a)postage
b)traveling
c)stationery
d)general expenses (12mks)
iii)Relevance and Reliability are one of the key primary qualitative characteristics of accounting information.Briefly explain valuable accounting information they advocate for (8mks)
Question two
a)A copy photocopier was purchased at sh 250000.The expected life was 5 years.using the double declining method,calculate the depreciation for the five years ( 8mks)
b)The following information relates to Bamburi cement factory stores ledger card for product x.
October 2 received 700 units @40/=
October 9 received 500 units @45/=
October 10 issued 400 units
October 15 issued 200 units
October 20 received 800 units @47
October 25 issued 400 units
October 27 received 400 units @49
October 30 issued 200units
Required;
Stores ledger card and show closings stock on 30th October under LIFO method (12mks)
Question three
The following trial balance was extracted from the books of Kangaroo traders at 31st march2011
DR CR
Capital 38000 sales 49276
return of goods 400 364
plant and machinery(cost) 12000
stock,1st April 2010 12400
salaries&wages 7240
purchases 28800
freehoul premises(cost) 10800
discount allowed and received 2640 1640
bills of exchange 6400 2080
furniture and equipment 2200
rate and trade licenses 720
staff pension 480
carriage inward s 600
sales promotion 1920
bad and doubtful debt 1st April 2010 480
office expenses 2400
debtors and creditors 14000 12000
provision for depreciation;
-plant &machinery 4000
-furniture &equipment 1000
personal expenses 1200
bank balance 4400
cash on hand 240
108840 108840
In addition the following information is available
i)Provision for bad and doubtful debts is to be increased to sh 700
ii)Depreciation at 12.5 percent on cost is to be made on plant,machinery and furniture and equipment.
iii)Creditors include rent received in respect of promises amounting to sh 4800
iv)The bank statement reflect a credit balance of sh 3800. A further examination of the records indicate that a dishonored cheque for sh 400 received from a customer has not been entered in the books of accounts,similarly ledger fees amounting to sh200 have not been entered in the cashbook.
v)Unpaid staff pension amounting to sh.120 has not been brought into account
vi)Closing stock was valued at sh 12000
Required
a)Adjusted trial balance
b)Trading profit and loss account for the year ending 31st march 2011
c)A balance sheet as at 31st march 2011
d)Post trial balance (20mks)
Question four
A)During the month of march 2009, the cash transaction of pwani traders were as follows
i)The cash balance as per the bank statement on 31st march was 578905.40
ii)The ledger account for cash has a balance as at 31st march was 514844.60
iii)Cash receipts march 31st amount to 8000 were left on the night depositing unit after banking hours.on 31st march therefore were not included o the bank statement
iv)Included in the 31st march bank statement was a credit memorandum for interest earned by the depositor on the account of amount 1600
v)A note left with the bank for collection worth sh73268 had already been collected by the banks and credit memorandum had already been issued.the note receivable had a face value of sh 70000
vi)The bank charges for the month of march were sh.389
vii)Cheques outstanding for the month of march were cheque no.129 of sh.18886.40,cheque no.429 for shs.25296.40, cheque no.539of shs 10763.
viii)The cheque no 229 for sh.90430 issued on march 12th being payment for wages had been erroneously entered in the accounting records as 108430
ix)Included in the march statement was a cheque of shs.3364 drawn by a customer of pwani traders.this cheque was marked NSF
REQUIRED
a)a bank reconciliation statement of pwani traders 10mks
b)journal entries to assist their accounts as 31st march 2009 10mks
B)Highlight and explain reasons as to why the balance as per the cash book differs with the balance as per the bank statements 10mks
Question five
a)Briefly explain at least four principles of accounting 8MKS
b)Briefly explain how a petty cash book operates 5mks
c)What area the benefits of a firm adopting FIFO method of stock vaccination 5mks
d)Distinguish between bad debts and provision for bad an doubtful debts 2mks
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