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Agbm 210: Financial Accounting I Agbm 211: Financial Accounting Question Paper
Agbm 210: Financial Accounting I Agbm 211: Financial Accounting
Course:Bachelor Of Agribusiness Management, Bachelor Of Science (Agricultural Economics), Bachelor Of Arts (Sociology & Economics)
Institution: Chuka University question papers
Exam Year:2013
CHUKA
UNIVERSITY
UNIVERSITY EXAMINATIONS
SECOND YEAR EXAMINATION FOR THE AWARD OF DEGREE OF
BACHELOR OF AGRIBUSINESS MANAGEMENT,
BACHELOR OF SCIENCE (AGRICULTURAL ECONOMICS),
BACHELOR OF ARTS (SOCIOLOGY & ECONOMICS)
AGBM 210: FINANCIAL ACCOUNTING I
AGBM 211: FINANCIAL ACCOUNTING
STREAMS: AGBM Y2S2, B.SC (AGEC) Y2S2, TIME: 2 HOURS
B.A (SOCI & ECON) Y1S2
DAY/DATE: THURSDAY 15/8/2013 11.30 A.M. – 1.30 P.M.
INSTRUCTIONS:
(i) Answer all questions.
(ii) Do not write on the question paper.
1. (a) Accounting is said to be a process which ends up at giving users the required
information for decision making. In line to this statement;
(i) Explain the coverage of accounting cycle. [8 marks]
(ii) Explain the term substance-over-form and with example how it is applied in accounting procedures. [3 marks]
(b) The following trial balance was extracted from the books of Terano East Africa
Enterprises as at 30th June 2013.
Particulars Dr (Sh) Cr (Sh)
Capital 250,000
Opening stock 25,000
Plant and machinery at cost 250,000
Motor vehicle at cost 80,000
Provisions for depreciation:
- Plant & machinery 20,000
- Motor vehicles 16,000
Purchases 360,000
Sales 600,000
Wages and salaries 60,000
Returns 40,000 20,000
Discounts 5,000 4,000
Carriage inwards 2,500
Carriage outwards 3,000
Postage and telephone 7,500
Water and electricity 8,600
Bad debts written off 1,500
Provisions for bad debts 1,000
General expenses 8,500
Rent and rates 15,000
Debtors 55,000
Creditors 46,600
Cash at hand 6,000
Cash at bank 30,000 _______
957,600
====== 957,600
======
Additional information:
(i) Closing stock was valued at Sh.22,500.
(ii) Depreciation to be charged at 30% and 10% on cost on motor vehicle and plant and machinery respectively.
(iii) Rent accrued Sh.3,000.
(iv) Pre-paid rates Sh.1,000.
(v) Outstanding electricity bill Sh.600.
(vi) Provisions for bad debts to be adjusted to Sh.1,300.
Required:
(i) Trading and profit and loss account for the year ended 30th June 2013.
[12 marks]
(ii) Balance sheet as at that date. [7 marks]
2. Kakuzi Farmers Agricultural Company is carrying out Agricultural business in Nakuru. The company had purchased two Tractors used in farming and transportation of products to the market. Both machinery are of same make purchased in July 1st 2010 at a cost of Sh.2,200,000 each. It is the company policy to depreciate them at 10% on cost on 31st December each year. It was later found that the company has not been preparing these records to date.
Required for the years 2010, 2011 and 2012
(a) Extract of profit and loss account [3 marks]
(b) Tractors account [4 marks]
(c) Provisions for depreciation account [7 marks]
(d) Extract of Balance Sheet [6 marks]
3. (a) Jane Kawira a graduate of Chuka University started an agricultural related
business at Chogoria on 1st July 2012 with the following capital.
? Sh.600,000 in Bank account
? Sh.250,000 in cash till of business
The following transactions took place during the month of July 2013.
- 3rd Purchased stock from Makanyengo in cash Sh.80,000
- 8th Sold goods to Kaangi on credit Sh.20,000, cash to Kamau Sh.110,000 and Chamwanda who paid by cheque Sh.30,000.
- 17th Purchased a motor vehicle by cheque from Mwandawiro Sh.452,000.
- 21st Paid Mamboleo cash of Sh.12,000 for commission due to him.
- 24th Received commission from Kis-Chogoria bottlers Sh.27,000.
- 28th Received a cheque of Sh.180,000 from Kaangi.
- 29th Paid Murungi by cheque Sh.120,000.
- 30th Deposited into bank account Sh.70,000.
Required:
(a) Two column cash book balanced off. [6 marks]
(b) Respective ledger accounts of the above transactions. [10 marks]
(c) Trial balance as at 31st July 2013. [4 marks]
4. (a) Mitamboni Cement Factory Ltd provided the following information for the year
ended 31st December 2012.
Opening stock 240,000
Purchases 740,000
Sales 1050,000
Closing stock 270,000
Total expenses 120,000
Balance sheet of Mitamboni Cement Factory Ltd
Particulars Sh. Sh.
Fixed Assets:
Land and buildings 800,000
Plant and machinery 400,000
Motor vehicles 350,000
Fixtures & fittings 250,000
1,800,000
Current Assets:
Debtors 200,000
Cash at hand 250,000
Cash at bank 200,000
Closing stock 250,000
Bills receivables 100,000
1,000,000
Less: Current liabilities:
Creditors 400,000
Bills payable 300,000
Accrued expenses 100,000
800,000 200,000
NET TOTAL ASSETS 2,000,000
=======
Financed by:
Capital 900,000
18% Debentures 600,000
Retained profits 400,000
Net profit 100,000 __________
CAPITAL EMPLOYED 2,000,000
=========
Required to compute:
(i) Stock turnover ratio [3 marks]
(ii) Net profit ratio [3 marks]
(iii) Current ratio [3 marks]
(iv) Liquidity ratio [3 marks]
(v) Return on Capital Employed [3 marks]
(b) Comment on liquidity status of the company. [5 marks]
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