Fundamentals Of Accounting Ii Question Paper

Fundamentals Of Accounting Ii

Course:Bachelor Of Commerce

Institution: Kenyatta University question papers

Exam Year:2009

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2009/2010
FIRST SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE

BAC 101:
FUNDAMENTALS OF ACCOUNTING II

DATE: Monday 23rd November, 2009

TIME: 8.00 a.m. – 10.00 a.m.
=================================================================

INSTRUCTIONS

Answer Question ONE and any other two
QUESTION ONE
The following trial balance was extracted from the Books of Simos as at 31st December,
2004.

Dr :

Cr.

Fixed Assets at Cost
i)
Land and Building
16800
ii) Motor
Vehicles
12,000
iii)
Plant and Machinery

Accumulated Depreciation 14,000
a)
Lands
&
Building

1,
500
b)
Plant
&
Machinery

7,500
c)
Motor
Vehicle

800
Stocks at January, 2004

10,000
Debtors/ Creditors

24,500

25,000
Investment

2,200
Cash at Bank

13, 800
Page 1 of 7
Bank
Loan

4000
Debentures

9,500
Profit & Loss 1st
Jan.
2004
2,935
Share Capital authorized and Issued 5000 7% Preference share of
£1, 100,000 ordinary shares of 25 pence
Sale
97,100
Sales
Returns

85
Purchase

53, 400
Purchase
Returns

1,050
Delivery Costs

5,000
Wages

20,000
Rent

3,600
Office Expenses

4,000

179,385
179,385
Additional information
1)
Stocks at 31st December, 2004 is valued £ 15,000

2)
A dividend of 5 pence per ordinary share has been proposed and the preference

dividend is to be provided for.

3)
Goods delivered on 28th Dec. 2004 which cost £ 2,000, have been included in the
final stock count but have not yet been invoiced by the supplier.

4)
Depreciation to be charged as follows.

i)
Building

10 % (on cost)

ii)
Plant and Machinery 10 % ( reducing balance)
iii)
Motor Vehicles
25% on cost

Page 2 of 7
5) On
1st October, 2004 Simos Ltd started to rent a warehouse which was owned by

Mombasa Municipal Council. The first 6 months rent (£ 18,00) was paid in advance
on
October
2004.
6)
Bad debts are £ 1,500. These are deemed irrecoverable and are to be written off.

A provision of 5% bad debts is to be established on the remaining debtors.
7) Debentures
interest
of
5% is to be provided for.
8)
20 % of wages is to be classified as distribution costs, 80 % is classified as
administrative.
9)
The bank loan and debenture are repayable in 2007.
10)
Taxation of £ 2,000 is to be provided for the financial statement.

Required
Prepare a trading, profit & loss statement for the year ended 31st Dec 2004 and the Balance
Sheet at the same date of Simos Company Ltd. Show your working.

[30 marks]

QUESTION TWO
Bidii Mauridi owns managers a small manufacturing business. The following balances have
been extracted from her books on 31st January 2008.

Dr.

Cr.
Capital
at
Feb
2008
171,
120
Account
payable

86,
000
Bank
balance

5400

Account Receivables
92,000

Drawings

60, 000

Administrative expenses
150,000

Advertising expenses
12,000
Factory
direct
wages

60,000

Factory indirect wages

24,000
Factory
power
36,000
Furniture
and
fitting

18,400
Heat
&
Light

16,000
Page 3 of 7

Plant& equipment

276,800

Motor Vehicle (Used by Salesmen) 144,000
Plant
hire

4,000
Provision
for
debts

3200

Provision for depreciation
a)
Furniture
&
Fitting

9200
b)
Plant & Equipment

138,400
c)
Motor Vehicle

24,000

Raw material purchases
228,000

Rent & rates

20,000
Sales

829,400

Selling & distribution expenses 66,400

Inventory at Cost 1st Feb 2008

Raw materials
8,000

Work progress
16,000

Finished goods
24,000

1,261,360

1261,360
Additional information
1)
Accruals at 31st January 2009 were

Factory power
shs 1,600

Rent & Rates
shs 4,000

2)
Prepayment of shs 800 for salesmen motor vehicle insurance .

3)
Inventory at 31st January 2009 were valued at Cost as follows:-
a)
Raw
Materials
15,200

b)
Work in Progress

30,000
c)
Finished goods

45,000

Page 4 of 7
4)
Depreciation is to be charged on plant and equipment, motor vehicle furniture and

fittings at the rates of 20% , 25% and 10% per annum respectively

5)
Expenditure in heat and light and rent and rates is to be apportioned between the
factory and office in the ratio of 9 to 1 and 3 to 2 respectively.
6)
The provision for bad debts is to be made equal to 5% of account receivable
(debtors) at 31st January 2008.

Required
Prepare Bidii Mauridi manufacturing, trading profit & loss account for the year ended 31st
January 2008 and the Balance Sheet at
the
same
date. [
20
marks]

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