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Bac 402 Specialized Financial Acounting And Techniques Question Paper

Exam Name: Bac 402 Specialized Financial Acounting And Techniques 

Category: Kenyatta University question papers

Exam Year:2011

KENYATTA UNIVERSITY
UNIVERSITY EXAMINATIONS 2011/2012
INSTITUTE OF OPEN LEARNING – (IOL)
EXAMINATION FOR THE DEGREE OF BACHELOR OF COMMERCE
AUGUST 2011 SESSION
BAC 402: SPECIALIST FINANCIAL ACCOUNTING TECHNIQUE

DATE:
Thursday, 15th December 2011
TIME: 11.00 a.m. – 1.00 p.m.
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INSTRUCTIONS:
ANSWER ALL QUESTIONS

Q1a. Explain the advantages of bills of exchange.



(6 marks)
b. Jabal company of Nairobi sent goods on consignment to Misra Ltd of Mombasa
valued at a cost of shs. 40,000. The consignor paid insurance and freight shs 3000
and shs 2000 respectively. The expenses paid by Misra Ltd. amounted to shs 4000.
The consignment at the sale of 2% of sales. The goods 66,000 payment was made by
Misra Ltd to Jabal company to a cheque.

Required

Show entries in the relevant accounts in the books of Misra Ltd.

(9 marks)
Q2
Toe and finger entered into joint venture to trade in refrigerators. It was agreed that
Tow would be entitled to a commission of 5% on all sales of refrigerators and profits
and lossed of the venture to be shared equally.

The following transaction took place:


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May 1
Toe purchased refrigerators at a cost of shs 200,000 paying shs 150,000 in
cash and accepting bill of exchange for the balance.

May 3
Toe sent finger refrigerators which had cost shs 84,000. Finger paid the
carriage changes on the refrigerators amounting to shs 12,000 and paid shs
20,000.

May 10 Finger purchases refrigerators at a cost of shs 70,000

June 3
Finger paid the bill which had accepted by Toe

June 15 Finger Paid insurance of shs 4,000 and carriage shs 3,000

June 30 It was agreed to close down the venture by which time sales buy toe were
shs 160,000 and those of finger shs 170,000. Toe agreed to take area the
remaining stock at cost for shs 5000.

Required
a)
Joint venture account in the books of both Toe and finger.
(12 marks)
b)
The memorandum Joint venture account.


(8 marks)

Q3a. Johnsen Ltd bought 8,000 ordinary shares of shs 10 each of Kalahari Ltd. on 1st
January 2007 at a cost of shs 12,000. On 1st July Kalahari Ltd announced a eight
issue of two ordinary shares for shs 15 per share. Johnsen Ltd took 60% of its
entitlement and sold the remaining 40% at shs. 7 per share.

Johnsen received dividend of 15% on ordinary shares in Kalahari Ltd on 31st
December 2007.

Required
a) Record the above transactions in the books of Johnsen Ltd for the year ended 31st
December







(30 marks)
b) Explain the following terms used in Royalty Accounts.
(i)
Minimum Rent





(2 marks)
(ii)
Short working





(3 marks)


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Q4a. Weaver Constitution Company Ltd won the contract for building Mbasasa College at
a cost of shs 240,000.

The data selecting to the contract during the year 2008 were as following:-

Shs ‘000
Material issued to the site
42,000
Cost of labours engaged on contract
7,200
Plant purchased and installed
36,000
Client expenditure
9,600
General changes
3,500
Material Returned to the store
5,000
Work certified
50,000
Work uncertified
14,000
Stock of material 31st Dec 2008
4,000
Value of plant 31st Dec 2008
24,000
The company received from the college payments amounting to shs 40,000,000

Required
i)
Contract account






(10 marks)
ii)
Contractee’s account





(4 marks)


Q4b. Discuss the main purpose of the following accounts
i)
Container stock account





(3 marks)
ii)
Container suspense account




(3 marks)


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