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Advanced Financial Accounting Ii Question Paper
Advanced Financial Accounting Ii
Course:Bachelor Of Commerce
Institution: Kenyatta University question papers
Exam Year:2008
KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2007/2008
SECOND SEMESTER EXAMINATION FOR THE DEGREE OF BACHELOR OF
COMMERCE
BAC 302: ADVANCED FINANCIAL ACCOUNTING II
DATE: TUESDAY, 17TH JUNE 2008
TIME: 2.00 P.M. – 4.00 P.M.
______________________________________________________________________
INSTRUCTIONS: ANSWER ALL QUESTIONS.
SHOW ALL YOUR WORKINGS.
1.
The following is a summary of the balances in the accounts of Kwale Limited and its
subsidiary, Jomvu Limited as at 31st March 2007.
Kwale Ltd.
Jomvu Ltd.
KShs “000”
KSh “000”
Property, plant and equipment at Cost
250,000
220,000
7500,000 ordinary shares in Jomvu Limited (at cost)
6,000,000 Pref. Shares in Jomvu limited (at cost)
60,000
6% debentures of Jomvu Ltd.
5,000
Current Assets
145,500
143,400
625,500
363,400
Authorised and issued capital, fully paid Ord. share
of sh10.00 each
300,000
100,000
7% Non-commulative Pref. Shares 10 00
-
80,000
General Reserves
50,000
40,000
P and L Account
98,500
44,400
Provision for Depreciation
60,000
30,000
6% Debentures
-
20,000
Proposed dividends:
Ordinary dividend
30,000
10,000
Preference dividend
-
5,600
Accrued Debenture interest
-
1,200
Trade payables
87,000
32,200
625,500
363,400
2
ADDITIONAL INFORMATION:
(1)
Kwale Limited acquired the shares of Jomvu Ltd cum-dividend on
31 March 2005.
(2)
The General reserve of Jomvu Ltd was the same on 31 March 2005 as on
31 March 2006. The balance on the profit and loss account of Jomvu Ltd
consist of:
Sh „000?
Balance on 31 March 2005
28,000
Net profit for the period ended 31/3/2006
32,000
60,000
Less proposed Dividends
15,600
44,400
(3)
The stock in trade of Jomvu Ltd on 31 March 2007 includes Sh6 million in
respect of goods purchased from Kwale Limited. These goods had been sold by
Kwale Limited to Jomvu Ltd at such a price as to give Kwale Ltd a profit of 20%
on the invoice price.
(4)
The balance on the P & L account of Jomvu Ltd on 31 March 2005 is after
providing for preference dividend of Sh5,600,000 and a proposed ordinary
dividend of KSh5 million, both of which were subsequently paid and credited to
the P & L account of Kwale Ltd.
(5)
No entries have been made in the books of Kwale Ltd in respect of the debenture
interest due from, or the proposed dividends of Jomvu Ltd for the year ended
31 March 2000.
(6)
On 31 March 2000, the authorized and issued ordinary share capital of
Jomvu Ltd had been increased by Sh20 million by capitalizing part of the general
reserve and issuing 2 million shares to the existing shareholders in proportion to
their existing holdings. The transaction has not yet been reflected in the books of
Kwale Ltd or Jomvu Ltd.
(7)
Group policy is to amortise goodwill on consolidation over 5 years using the
straight line method.
REQUIRED
A consolidated Balance Sheet for Kwale Limited and its subsidiary Jomvu Limited as at
31 March 2007.
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