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Acct 411: Advance Accounting 1 Question Paper
Acct 411: Advance Accounting 1
Course:Bachelor Of Commerce
Institution: Kabarak University question papers
Exam Year:2009
KABARAK UNIVERSITY EXAMINATIONS
2008/2009 ACADEMIC YEAR
FOR THE DEGREE OF BACHELOR OF COMMERCE
COURSE CODE: ACCT 411
COURSE TITLE: ADVANCE ACCOUNTING I
STREAM: Y4S1
DAY: TUESDAY
TIME: 2.00 – 4.00 P.M.
DATE: 24/03/2009
INSTRUCTIONS:
- Answer question ONE and any other TWO questions
- Show all your workings.
- Be neat and tidy in your presentations.
QUESTION ONE
a) Differentiate between a joint venture and a partnership. (5mks)
b) List and briefly explain the similarities between a joint venture and a partnership.
(5mks)
c) A company operating in bungoma extended its operations to Nairobi branch. All
purchases are made by the head office and goods are charged to branch at a cost
plus 25%. The following information is presented by Nairobi branch on 31st
December 2001.
Opening stock 1 Jan 30,000
Debtors 1st Jan 45,000
Closing stock 25,000
The following transactions took place to 31st Dec 2001
Goods sent to branch 250,000
Goods returned to H/O 20,000
Cash sales 80,000
Credit sales 270,000
Returns from customers 10,000
Bad Debts 2,000
Discount allowed 3,000
Branch expenses 50,000
Goods stolen 3,000
Cash stolen 1,500
Cash received from debtors 245,000
Required:
Relevant ledger accounts to record the above transactions. (20mks)
QUESTION TWO
The following trial balance was extracted from the books of Wekesa and Nanjala, a
business partnership as at 31st March 2008.
Sh. Sh.
Capital: Wekesa 250,000
Nanjala 140,000
Current accounts: Wekesa 4,000
Nanjala 2,000
Drawings Wekesa 10,000
Nanjala 8,000
Motor vehicles at cost 300,000
Furniture at cost 100,000
Provision for depreciation Motor vehicles 60,000
Furniture 15,000
Stock on 1 April 2007 50,000
Debtors 36,000
Creditors 40,000
Provision for bad debts 3,000
Purchases 300,000
Sales 500,000
Cash 1,000
Bank overdraft 7,000
Carriage inwards 20,000
Discount received 5,000
Electricity 12,000
Rent 60,000
General expenses 129,000
1,026,000 1,026,000
Additional Information:
1. The partnership deed provides for:
· Sharing of profits and losses between Wekesa and Nanjala in the ration of 7:3
respectively.
· A salary of Sh.24,000 per annum to Wekesa.
2. Depreciation is provided as follows:
· Motor vehicles 20% on book value
· Furniture 10% on cost.
3. Provision for bad debts is maintained at 2% of Debtors
4. As at 31st March 20X8:
· Rent prepaid was Sh.10,000
· Electricity accrued was Sh.2,000
· General expenses include Sh.9,000 incurred by Wekesa on his private affairs.
· Closing stock was Sh.70,000
Required:
a) Trading profit and loss account for the year ended 31st March 20X8
b) Partners current accounts
c) Balance sheet as at 31st March 20X8 (20mks)
QUESTION THREE
a) Differentiate between consignment and sales (6mks)
b) A consignment of 10,000kg of sugar costing sh.50 per kg, sent on consignment on
1
st January 2009 to an agent on commission of 10% on gross sales to the
consignee. The following expenses were incurred during the transaction process.
By consignee:
Rent and insurance sh. 600
Other expenses sh.1,200
By consignor:
Transport and insurance sh.4,000
Dock charges sh.1,000
Some packages containing 2000kg of sugar were damaged in transit and content
contaminated with other chemicals and this had to be destroyed on landing since
they were sold at sh.65 per kg. On 31st December 2008, the balance of
consignment remained unsold.
Required:
Draw up the consignment account in the books of the consignor, showing the
amount due. (14mks)
QUESTION FOUR
a) Mr. Macharia and Ms. Kamangol entered into a joint venture to sell a
consignment of timber sharing the profit and losses equally. Mr. Macharia
provided timber to the joint venture at £ 10,000. He paid expenses a mounting to
£ 500. Miss Kamangol incurred further expenses on fuel, storage and treatment
charges of £ 1,300 and received cash sales of £ 6,000. Miss Kamangol took over
goods to the value of £ 2,000 for her own use. At the close of accounting period,
Mr. Macharia took over the balance stock in hand valued at £ 2,200 for his own
use.
Required:
Prepare joint venture account and co-venture account in the books of Macharia.
(20mks)
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