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Bac 100: Fundametals Of Accounting I Question Paper
Bac 100: Fundametals Of Accounting I
Course:Bachelor Of Commerce
Institution: Kenyatta University question papers
Exam Year:2011
DATE:
Wednesday 3rd August 2011
TIME:
8.00a.m – 1.00p.m
INSTRUCTIONS
1. Answer ALL the four questions.
2. Provide logical and complete answers as much as possible
3. Marks for each question are indicated at the end of every question
Q1.
Baraka David owns a retail business. She employed book-keeper who had no
experience to keep her records. For the year ended 31 March 2009, the book-
keeper provided the following trial balance.
Dr
Cr
Sh.
Sh
Fixed assets at cost
18,300
Provision for depreciation 2,800
Stocks: April, 2008
3,700
March 31 2009
2,960
Debtors
1,825
Creditors
864
Bank overdraft
382
Capital
26,860
Drawings
7,740
Sales
26,080
Purchases
18,327
Operating expenses
6,904
Provision for doubtful
90
debts
Suspense Account
16,888
66,860
66,860
The following errors were revealed in the accounting system after the preparation
production of the trial balance.
i)
The totals of the sales day book for December 2008, had been overstated
by sh. 120.
ii)
In January2009, office equipment purchases for sh. 360 had been debited to
purchases account.
iii)
Cheque payment of sh 216 to a creditor had been recorded as sh. 261.
iv)
A credit note of sh.37 sent for customer had been overlooked.
v)
The owner had withdrawn a cheque for sh. 80 for private use in October
2008; both the bank and drawings account had been credited with the
amount.
Required:
a) A corrected revision of the trial balance dated 31st March, 2009. [15marks]
b) Journal entries to correct the above errors.
[5marks]
c) The suspense account starting with the amount in the corrected trial balance
given in part (a) of the question.
[5marks]
Q2.
The trial balance of a trader at 31st December 2010 is provided below:
Dr
Cr
Sh.
Sh
Capital on Jan, 2010
40,000
Freehold property
10,800
Depreciation on freehold property 1,200
Insurance prepaid (Jan 1 2010)
300
Stock on Jan 1, 2010
14,360
Furniture and fittings
1,500
Insurance paid
3,000
Sales
80,410
Returns inwards
1,590
Purchases
67,350
Returns outwards
2,520
Office expenses
5,100
Bad debts
1,310
Carriege out
1,590
Carriege in
1,450
Salaries and Commission
4,950
Discount
150
Expense creditors
400
Page 2 of 4
Debtors
11,070
Creditors
4,700
Cash in hand and at bank
2,610
128,180
128,180
Notes
1. Stock at hand sh. 10,700 including stationery stock sh. 200.
2. Insurance prepaid sh. 330.
3. Office expense include stationery purchase of sh. 800.
4. Carriege inwards include carriege paid on furniture sh. 50.
5. Included among expenses for office is an amount of sh. 1,000 paid for acquisition
for freehold property.
6. Debtors include
a) Sh. 400 considered definitely bad.
b) Sh. 1,000 considered definitely good
c) Sh 600 considered very much doubtful.
7. Provision for doubtful debts be made at 5% of the debtors.
Required:
Show
i)
The trading profit and loss account for the year 31 December, 2010.
[15marks]
ii)
Balance sheet as at 31st December, 2010.
[10marks]
3.
a)
Briefly explain the following assumptions.
i)
Economic entity
ii)
Monetary unit
[4marks]
b)
Two broad sets of users need accounting information. Identify these two
sets of users to give examples of each.
[6marks]
4.
The Ruth security service began operations on January 1, 2010. At the end of the
first year of operations the trial balance shows the following.
Page 3 of 4
Trial balance
December 31, 2010
Dr
Cr
Cash
Sh 124,000
Fixed Deposit
120,000
Fees receivable
32,000
Supplies
15,000
Prepaid insurance
36,000
Automobiles
580,000
Notes Payable
450,000
Unearned fees
25,000
C. Ruth, Capital
180,000
Fees Earned
1,335,000
Salaries expenses
570,000
Repairs expenses
60,000
Gas and oil expenses
93,000
Rent expenses
360,000
_________
1,990,000
1,990,000
Other data
i)
Fees earned but unbilled sh 18,000 at December 31.
ii)
Insurance coverage began on January 1 under a two year policy.
iii)
Automobile depreciation is sh 150,000 for the year.
iv)
Interest of 54,000 accrued on notes payable for the year.
v)
Sh. 10,000 of the unearned fees has been earned.
vi)
Drivers salaries total sh 5,000 per day. At December 31, four days salaries
are unpaid.
vii)
Repairs to automobiles sh 6,500 have been incurred, but bill have not been
received prior to December 31.
viii) The fixed deposit was placed on 1 October 2010 for one year and interest
accrues at 10% p.a.
ix)
An inventory count at 31 December reveals that supplies of sh. 6,000 are
on hand.
x)
The rent expenses represents lent for three years paid on January 2010.
Required:
Prepare annual adjusting entries as at 31 December 2010.
[20marks]
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