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Bcom 110: Principles Of Accounting I Question Paper
Bcom 110: Principles Of Accounting I
Course:Bachelor Of Commerce
Institution: Chuka University question papers
Exam Year:2013
CHUKA
UNIVERSITY
UNIVERSITY EXAMINATIONS
FIRST YEAR EXAMINATION FOR THE AWARD OF DEGREE OF
BACHELOR OF COMMERCE
BCOM 110: PRINCIPLES OF ACCOUNTING I
STREAMS: BCOM Y1S1 TIME: 2 HOURS
DAY/DATE: THURSDAY 8/8/2013 2.30 P.M. – 4.30 P.M.
INSTRUCTIONS:
Answer all questions.
Do not write on the question paper.
1. (a) The Kenya Accounting Standards 1 has outlined the fundamental accounting
concepts which are generally accepted in preparation of periodic financial accounts of business. In the light of KAS 1 describe the generally accepted accounting principles. [10 marks]
(b) The following trial balance was extracted from the books of Farm-house enterprises as at 30th June 2013.
Particulars Dr Cr
(Sh 000) (Sh 000)
Sales 12,150
Stock 1st July 2012 918
Cash at Bank 540
Discounts 90 304
Capital 491
Water and electricity 11
Current deposits 22
Motor vehicles at cost 350
Free hold land and buildings (cost) 1,410
Purchases 10,406
Commission received 20
Debtors and creditors 818 1,700
Fixtures & fittings at cost 90
Drawings 95
Provisions for bad debts 37
Bad debts 35
Salaries and wages 58
Carriage outwards 96
Carriage inwards 116
Returns 22 19
20% loan from K-rep 420
Loan interest 63
Office expenses 45
Rent and rates 105
Cash in hand 8
Provisions for Depreciation
- Motor vehicle 140
- Furnitures& fittings ________ 17__
15,298
======= 15,298
=======
Additional information:
1. Closing stock was valued at Sh.800,000.
2. Pre-paid rent amounted to Sh.42,000.
3. The provisions for bad debts to be adjusted to 5% of trade debtors.
4. The proprietor had taken goods, Sh.41,000 for domestic use.
5. A further amount of Sh.10,000 is to be written off as bad debts.
6. Provisions of depreciation to be provided as follows:
(i) Motor vehicle 20% on straight line.
(ii) Fixtures & fittings at 10% on reducing balance.
7. Electricity bill for the month of June 2013 amounting to KSh.8000 was paid on 3rd July 2013.
8. Loan interest of Sh.21,000 has not yet been paid.
Required:
(i) Trading and Profit and Loss account for the year ended 30th June 2013.
[11 marks]
(ii) Balance sheet as at that date. [9 marks]
2. On 1st January 2010 Chogoria Tea factory purchased two vehicles costing Sh.1,000,000 and Sh.1,200,000. The company policy was to depreciate the vehicles on straight line method at 10% p.a. On 1st January 2013 the directors discovered that the records of assets in the company has not been kept for reporting purposes and preparation of final accounts
Required to prepare the following accounts records for the motor vehicles for the years 2010, 2011 and 2012 assume the year ended 31st December each year.
(a) Extract of profit and loss account. [3 marks]
(b) Motor vehicle account [4 marks]
(c) Provisions for depreciation account [7 marks]
(d) Extract of Balance sheet [6 marks]
3. (a) GesimaPower Mills Ltd has provided the following information for the year
ended 30th June 2013.
Balance Sheet of Gesima Power Mills Ltd.
Details Sh Sh
Fixed Assets:
Land and buildings 700,000
Plant and machinery 500,000
Motor vehicles 450,000
Fixtures and fittings 150,000
1,800,000
Current Assets:
Debtors 250,000
Cash at bank 300,000
Cash at hand 150,000
Stock 200,000
900,000
Less: Current liabilities
Creditors 400,000
Proposed dividends 250,000
Provisions for tax 50,000 700,000 200,000
TOTAL ASSETS (NET) 2,000,000
=======
Financed by:
Capital 1,000,000
10% KCB loan 500,000
Retained profits 500,000 _________
CAPITAL EMPLOYED
======= 2,000,000
========
Required:
(i) Stock turnover ratio [3 marks]
(ii) Net profit ratio [2 marks]
(iii) Current ratio [2 marks]
(iv) Liquid ratio [2 marks]
(v) Return on Capital Employed [3 marks]
(b) Outline the advantages of preparing control accounts. [4 marks]
(b) Distinguish between revenue expenditures and capital expenditures and explain
how they are treated in the books of accounts. [4 marks]
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