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Bcom 111/Bbam 111: Principles Of Accounting Ii Question Paper
Bcom 111/Bbam 111: Principles Of Accounting Ii
Course:Bachlor Of Purchasing & Supplies Management, Bachelor Of Cateriing & Hotel Management & Bachelor Of Entrepreneurship And Small Business Management
Institution: Chuka University question papers
Exam Year:2013
CHUKA
UNIVERSITY
UNIVERSITY EXAMINATIONS
FIRST YEAR EXAMINATION FOR THE AWARD OF DEGREE OF
BACHELOR OF COMMERCE
BACHLOR OF PURCHASING & SUPPLIES MANAGEMENT,
BACHELOR OF CATERIING & HOTEL MANAGEMENT &
BACHELOR OF ENTREPRENEURSHIP AND SMALL BUSINESS MANAGEMENT
BCOM 111/BBAM 111: PRINCIPLES OF ACCOUNTING II
STREAMS: BCOM, BPSM,BCHM,BENS Y1S2 TIME: 2 HOURS
DAY/DATE: MONDAY 12/8/2013 11.30 A.M. – 1.30 P.M.
INSTRUCTIONS:
ANSWER ALL QUESTIONS.
DO NOT WRITE ON THE QUESTION PAPER.
QUESTION ONE
(a) Amber and Beryl are in a partnership sharing profits in the ratio 60:40 after charging annual salaries of £20,000 each. They regularly make up their accounts to 31 December each year.
On July 1996 they admitted Coral as a partner and agreed profits shares from that dateof 40% Amber, 40% Beryl and 20% Coral. The salaries credited to amber and Beryl ceased from 1 July 1996.
The partnership trial balance at 31 December 1996 was as follows:
£ £
Capital accounts as at 1.1.96:
Amber 280,000
Beryl 210,000
Capital account Coral 140,000
Current accounts
Amber 7,000
Beryl 6,000
Drawings accounts
Amber 28,000
Beryl 24,000
Coral 15,000
Loan Account Amber 50,000
Sales 2,000,000
Purchases 1,400,000
Stock 1.1.96 180000
Wages and salaries of staff 228,000
Sundry expenses 120,000
Provision for doubtful debts at 1.1.96 20,000
Freehold land at cost (see note (e) below 200,000
Buildings: cost 250,000
Aggregate depreciation 1.1.96 30,000
Plant, equipment and vehicles: cost 240,000
Aggregate depreciation 1.1.96 50,000
Trade debtors and creditors 420,000 350,000
Cash at bank 38,000 _______
3,143,000 3,143,000
In preparing the partnership accounts the following further information is to be taken into account:
(a) Closing stock at 31 December 1996 was £200,000.
(b) Debts totaling £16,000 are to be written off and the provision for doubtful debts increased by £10,000.
(c) Amber’s loan carries interest at 10% per annum and was advanced to the partnership some years ago.
(d) Provide depreciation on the straight-line basis on cost as follows:
Buildings 20%
Plant, equipment and vehicles 10%
(e) Profits accrued evenly during the year.
Required:
(i) Prepare a trading account, profit and loss account and appropriation account for the year ended 31 December 1996. [10 marks]
(ii) Prepare partners current accounts for the year in columnar form. [5 marks]
(b) The following is the cash book (bank column) of Ngayi W Traders for November 2008.
2008
Nov. 6 J.Ohalo Traders 19,530 Nov 1 Balance b/d 487,872
10 Wamae enterprises 23,814 10 Mbao East 25,956
30 Ndimu Traders 26,586 19 Robert Waweru 39,690
30 Balance c/d 94,172 29 Philip Mbagi10,584
564,102 564,102
The bank statement for the month is given below.
2008 Dr. Cr. Balance
Nov 1 Balance 487,872 DR
6 Cheque 19,530 468,342 DR
13 Mbao East 25,956 494,298 DR
20 Cheque 23,814 470,484 DR
22 Robert Waweru 39,690 510,174 DR
30 Standing orders 25,200 535,374 DR
30 K-Stout traders credit 22,680 512,694 DR
30 Bank charges 8,190 520,884 DR
(i) Prepare an updated cash book
(ii) Prepare a bank reconciliation statement as at 30th Nov 2008. [10 marks]
QUESTION TWO
(a) Discuss the limitation of ratio analysis. [4 marks]
(b) Discuss the three common types of stock in a manufacturing concern. [3 marks]
(c) Discuss the contents of a partnership deed. [6 marks]
(d) Mamba Sports Club received KSh.2,050,000 in the financial year.
The balances appeared as follows for different dates.
31/03/2000 31/03/2001
Subscription in arrears 300,000 375,000
Subscription in advance 85,000 -
Required:
Compute the subscription figure to be shown in the income and expenditure account.
[2 marks]
QUESTION THREE
The following is an extract of B. Spike Ltd.
B. Spikes
Trial Balance as on 31 December 2002
Dr Cr
Stock of raw materials 1.1.2002 21,000
Stock of finished goods 2.2.2002 38,900
Work in progress 1.1.2002 13,500
Wage (direct £180,000: factory indirect £145,000) 325,000
Royalties 7,000
Carriage inwards (on raw materials) 3,500
Purchases on raw materials 370,000
Productive machine (cost £280,000) 230,000
Accounting machinery (cost £20,000) 12,000
General factory expenses 31,000
Lighting 7,500
Factory power 13,700
Administrative salaries 44,000
Sales representatives’ salaries 30,000
Commission on sales 11,500
Rent 12,000
Insurance 4,200
General administration expenses 13,400
Bank charges 2,300
Discounts allowed 4,800
Carriage outwards 5,900
Sales 1,000,000
Debtors and creditors 142,300 125,000
Bank 56,800
Cash 1,500
Drawings 20,000
Capital as at 1.1.2002 _________ 296,300
1,421,300
========= 1,421,300
=======
Notes at 31.12.2002
1. Stock of raw materials £24,000, stock of finished goods £40,000, work in progress £15,000.
2. Lighting, and rent and insurance are to be apportioned: factory 5/6ths, administration 1/6th.
3. Depreciation on productive and accounting machinery at 10 per cent per annum on cost
4. Recognize a factory profit of 1% on production cost.
Required: Prepare a manufacturing, Trading Profit and Loss Account for the year ended
31 December 2002. [15 marks]
QUESTION FOUR
The balance sheet of Grand Limited, a wholesaler, at 31 December 1195 and 1996 were as follows:
31 December
1995 1996
£000 £000 £000 £000
Tangible fixed assets
Cost of valuation 126,300 162,400
Aggregate depreciation (50,000) 76,300 (64,000) 98,400
Current assets
Stock 12,000 15,000
Debtors 10,500 14,000
Cash 1,400 2,000
23,900 31,000
Current liabilities
Trade creditors 6,800 9,400
Corporation tax 3,400 5,000
Proposed dividend 4,000 6,000
14,200 20,400
Net current assets 9,700 10,600
86,000 109,000
Loans (due for repayment (60,000) (60,000)
1999) 26,000 49,000
Called up share capital 6,000 10,000
Share premium 1,000 3,000
Revaluation reserve - 8,000
Profit and loss account 19,000 28,000
26,000
======= 49,000
=======
The summarized profit and loss accounts for the company for the years ended 31 December 1995 and 1996 were:
Year ended 31 December
1995 1996
£000 £000
Sales 64,000 108,000
Cost of sales 40,000 75,600
Gross profit 24,000 32,400
Expenses 10,000 12,400
Net profit before tax 14,000 20,000
Required:
Prepare a cash flow statement as at 31st December 1996. [15 marks]
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