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Introduction To Accounting Ii Question Paper

Introduction To Accounting Ii

Course:Bachelor Of Commerce

Institution: Multimedia University Of Kenya question papers

Exam Year:2012

MULTIMEDIA UNIVERSITY COLLEGE OF KENYA
HBC:2104 INTRODUCTION TO ACCOUNTING II CAT1:(18/06/2012)
TIME ALLOWED 1HR15MIN

QUESTION ONE

The following information has been extracted from the books of loliondo springs of life(LSL)
AS AT 31ST DEC 2010

DR CR
000 000
Sales 10,000
carriage outwards 59
inventory of raw materials(01.01.10)21o
bank 168
inventory on finished goods
(01.01.10) 389
work in progress(01.01.10) 135
wages 3250
cash 15
drawings 600
royalties 70
capital 3578
carriage inwards(on raw materials) 35
purchases of raw materials 3700
productive machinery(cost2,800,000) 2300
office computers(cost 200,000) 120
general factory expenses 310
lighting 75
factory power 137
administrative salaries 440
sales rep''s salaries 300
commission on sales 115
rent 120
insurance 42
general administrative expenses 134
Bank charges 23
Discounts allowed 48
Accounts receivable 142 640
__________________________________
14,218 14,218
___________________________________
additional information
(a)depreciation on productive machinery and on office computers at 10% per annum on cost
(b)wages include factory direct wages of shs.1,800,000 and factory indirect wages of 1,450,000
(c)Lighting,rent and insurance are to be apportioned:factory 5/6,administration 1/6
(d)Inventory as at 31stDecember 2010 was as follows:
Raw material shs.240,000
finished goods shs.400,000
work in progress shs. 150,000
REQUIRED:manufacturing statement of comprehensive income for the year ended 31st December 2010 and statement of financial position as at that date(20 marks)

QUESTION 2
(a) Explain the factors that affect the computation of depreciation (4marks)
(b)Blingbling ltd,at 31st December 2010.had a balance on its equipment a/c of shs 5,000,000.This balance represents equipment at cost.The balance on the depreciation provision account as at the same date was shs 2,000,000.
The company''s policy is to write off such equipment at 20% straight line and depreciate assets in the year of purchase but not in the year of sale.on 1st October 2011,the company sold one of its equipment for 75000.The equipment had been purchased five years earlier on 1 January 2007, for shs 750000.at which time the company had estimated its useful economic life at five years and its scrap value after that time of Shs. 50,000

Required:
For the year 31 st 2011
(a) determine the profit or loss on the disposal (2marks)
(b)show the provision for depreciation account (3marks)
(c)show the equipment account (3marks)
(d)prepare the equipment disposal account (3marks)
(e)prepare an extract of the profit and loss account (3marks)
(f)prepare an extract of the statement of financial position (2marks)

QUESTION 2

Introduction To Accounting Ii Question Paper

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