Get premium membership and access revision papers, questions with answers as well as video lessons.
Bust 211:Intermediate Financial Accounting Question Paper
Bust 211:Intermediate Financial Accounting
Course:Bachelor Of Education Arts
Institution: Chuka University question papers
Exam Year:2010
INSTRUCTIONS:
Answer all the questions.
Q.1 Sky Ltd buys and sells units of product X during the month of January.
Stock movements during January were: Date Transactions Units Sh. 1 Purchased 200 at Sh.100 2 Purchased 200 at 110 14 Sold 250 at 150 21 Purchased 150 at 120 31 Sold 100 at 155
(a) Calculate closing stock, the costs of sales and gross profit using each of the following method at 31 January and comment on the results obtained.
(i) First In First Out (FIFO) (ii) Last In Last Out (LIFO) (iii) Weighted Average Cost (AVCO)
(b) Identify which methods of stock valuations are permitted under IAS2-Inventories.
2
Q.2 A, B and C are trading in partnership. The following information has been extracted from the partnership agreement and books of account for the year ended 31 October 2008.
(i) Partners are to be credited with interest on capital account balances at the rate of 9% .a. Interest is to be changed on cash drawing only at the rate of 10% p.a.
(ii) The partnership net trading profit for the year per draft accounts amounted to Sh.72,190 and the profit is to be appropriated in the ratio 1:2:3 for A, B and C respectively.
(iii) Cash drawing during the year amounted to: A Sh.5,500, B Sh.6,200 and C Sh.4,900.
All cash drawing took place on 30th April 2008.
(iv) The balance on partners current and capital accounts are:
Capital A/C (Sh) Current A/C (Sh) A 18,000 Cr 9310 B 40,000 Cr 4650 C 33,000 Cr 2170
(v) Each partner had taken goods for his own use during the year as follows:
A Sh.3200, B Sh.1900 and C Sh.2500. No entries have been passed through the books of account.
(vi) An insurance premium of Sh.230 relating to B’s home was paid by partnership and charged to the profit and loss Account.
(a) A statement of corrected net profit for the partnership for the year ended 31 Oct. 2008. [7 marks]
(b) The profit and loss appropriation account for the year ended 31 Oct. 2008. [7 marks]
(c) The capital and current accounts of A, B and C as they would appear in the balance sheet at 31 Oct. 2008. [7? marks]
3
Q.3 (a) Explain the advantages of bonus issues to a company. [6 marks]
(b) Uchumi Ltd invited applications for 500,000 ordinary shares of Sh.1 each at Sh.1.30, payable as to Sh.0.40 on application, Sh.0.7 (including Sh.0.3 premium) on allotment and Sh.0.20 on first and final call 4 months after allotment. Applications for all the shares were received and the shares duly allotted. All the allotment money was received but the holder of 1000 shares failed to meet the call, and forfeited his shares in accordance with the articles of the company. All the forfeited shares were subsequently reissued as fully paid shares at Sh.0.8 each.
Required:
Record the above transactions in the appropriate ledger accounts. [15? marks]
-----------------------------------------------------------------------------------------------------------
More Question Papers
Popular Exams
Return to Question Papers