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Hbc2104:Introduction To Accounting Ii Question Paper
Hbc2104:Introduction To Accounting Ii
Course:Bachelor Of Commerce
Institution: Meru University Of Science And Technology question papers
Exam Year:2011
QUESTION ONE (20 MARKS)
a) State and briefly explain any three distinguishing features between (i) A receipts and payments account and (ii) Income and expenditure account. (6 Marks) b) The accountant of Mamba Sports Club has extracted the following information from the books of account for the year ended 31 March 2001 Receipts
Balance brought forward
Subscriptions:
Year 1999/2000
2000/2001
2001/2002
Dinner dance
Beverage sales
Investment income
Sh.
288,000
249,000
2,050,000
194,000
723,000
657,000
400,000
Payments
Salaries and wages
New equipment
Repairs and maintence
Office expenses
Printing and stationery
Purchase of beverages
Dinner dance expenses
Refund of subscriptions
Sport prizes
Transport
Sh.
254,000
565,000
124,000
415,000
168,000
497,000
315,000
45,000
25,000
248,000
Balances as at
Furniture and fittings (net)
Equipment (net)
Investment at cost
Subscriptions in arrears
Salaries accrued
Stock of beverages
Subscription in advance
_________
4,561,000
Investments
Balance carried forward
31 March 2000
Shs.
240,000
690,000
3,500,000
300,000
68,000
162,000
85,000
1,500,000
405,000
4,561,000
31 March 2001
Shs.
-
-
-
375,000
72,000
184,000
-
Additional information: 1. Subscriptions in arrears are written-off after twelve months. 2. Depreciation is provided for on reducing balance method at 10% and 20% per annum on furniture and fittings and equipment respectively 3. Investments, which had cost sh.500,000 were sold on 30 march 3001 for sh.625,000. No entries have been made in the books in this respect. Required: (i) Income and expenditure account for the year ended 31 March 2001 (8 Marks) (ii) Balance sheet as at 31 March 2001 (6 Marks)
QUESTION TWO (20MARKS)
a) Meru PLC are wholesalers. The following is their trial balance as at 31 December 2006/ Shs. Shs. Dr Cr Ordinary share Capital: Shs 1 shares 150,000 Share Premium 10,000 General Reserve 8,000 Retained profits as at 31/12/2005 27,300 Stock: 31/12/2005 33,235 Sales 481,370 Purchases 250,270 Return Outwards 12,460 Return Inwards 13,810 Carriage Inwards 570 Carriage Outwards 4,260 Warehouse wages 50,380 32,145 Administrative Wages and Salaries 29,900 Plant and machinery 62,500 Hire of Motor Vehicles 9,600 Provision for Depreciation-Plant and Machinery accumulated depreciation As at 1/1/06 24,500 Goodwill 47,300 General Distribution Expenses 2,840 General Administrative Expenses 4,890 14,800 Rents Receivable 3,600 Trade receivables 164,150 Cash at Bank 30,870 Trade payable _______ 34,290 751,520 751,520
You are given the following information: 1. Closing Stock at 31/12/06 has been valued at shs45,890. 2. Plant and Machinery is to be depreciated at 20% straight line. 60% relates to distributive expenses, 40% relates to administrative expenses. 3. Motor vehicle hire is to be split shs6,200 to distribution and shs3,400 to administrative expenses. 4. Audit fees of shs600 need to be accrued for the year ending 31/12/06. 5. A corporation Tax provision of shs29,100 is needed. 6. A final dividend of sh0.36 per share approved by the directors has not yet been accounted for. 7. An impairment review is undertaken in respect of the goodwill and its value is found to have been impaired by shs5,000. Required; A Trading and Profit and Loss Account for the year ended 31 December 2006 and a Balance Sheet as at 31 December 2006.
QUESTION THREE (20 MARKS)
Poly Pink and Benjamin Brown are in Partnership sharing profit and losses two thirds and one third respectively. Interest on capital at 5% is to be credited to partners annually. The trial balance of their books at 31 December is as follows:
Shs. Shs. P Pink: Capital account 36,000 Current account balance, 1 January 1,200 Drawing account 10,400 B Brown Capital account 16,000 Current account balance, 1 January 800 Drawing account 8,470 Office furniture at cost 8,400 Sundry debtors and creditors 29,340 8,540 Purchases and sales 370,600 430,210 Stock, 1 January 18,800 Carriage inwards 2,920 Returns inwards and outwards 1,250 2,200 Rent 3,750 Salaries 6,300 Carriage outwards 560 Discounts 3,310 Provisions for bad debts 5,000 Advertising 8,000 Rates 1,800 Insurance 620 National insurance 270 Telephone 260 General Expenses 1,330 Printing and Stationery 640 Postage 1,170 Repairs 210 Electricity 180 Bank charges 60 Investments: 16,000 5% debenture stock at cost 15,570 Interest on investments 400 Cash at bank 12,930 Cash in hand 190 503,660 503,660
Additional information 1. Stock at 31 December is valued at ksh12,870 2. One quarters rent is outstanding 3. Rates unexpired Ksh360 4. Insurance unexpired Ksh210 5. 6 months interest accrued on investment 6. Write off bad debts ksh670 7. Depreciate office furniture at 5% p.a.
8. Carry forward one half of amount spent on advertising. Required: Prepare Trading profit and Loss and appropriation accounts for the year ended 31 December 2006 and a balance sheet as at that date.
QUESTION FOUR (10 MARKS)
a) Explain the limitations of single entry book keeping (4 Marks) b) Compare and contrast the final accounts of a sole proprietor with that of a partnership (6 Marks)
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