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Fundamentals Of Accounting Question Paper
Fundamentals Of Accounting
Course:Bachelor Of Commerce
Institution: Kenyatta University question papers
Exam Year:2009
KENYATTA UNIVERSITY
KITUI CAMPUS
UNIVERSITY EXAMINATIONS 2008/2009
EXAMINATION FOR THE DEGREE OF BACHELOR OF COMMERCE
BAC 100: FUNDAMENTALS OF ACCOUNTING I
DATE: MONDAY, 19TH JANUARY 2009 TIME: 9.30 A.M. – 11.30 AM.
INSTRUCTIONS: ANSWER ALL QUESTIONS.
1.
After several seasons of professional football competition Oluoch had saved enough money
to start his own football school, to be known as Winners Football College. During
December 2008, while organising the business, Oluoch prepared the following journal
entries to record all December transactions. He has not posted these entries to ledger
accounts. The ledger accounts to be used are: Cash 1, Office supplies 9, land 20, Football
fields 22, Football equipment 25, Notes payable 30, Account payable 31, and Oluoch
Capital 50.
General Journal
December 1
Cash
2,100,000
Oluoch Capital Investment in business by
2,100,000
owner
3
Land
3,388,000
Football fields
5,250,000
Cash
1,400,000
Notes payable
7,238,000
Purchased land and football fields
6
Football Equipment
117,600
Accounts Payable
117,600
Bought equipment on credit from Nairobi
Sports House
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2
7
Office supplies
22,050
Accounts payable
22,050
Bought supplies from Nairobi Stationers
12 Football equipment
50,750
Accounts payable
50,750
Bought equipment from Nairobi
Sportshouse
17 Accounts payable
22,050
Cash
22,050
Made payment of liability to Nairobi
Stationers
22 Accounts Payable
50,750
Cash
50,750
Made payment of liability to Nairobi
Sportshouse for purchase of December 12.
REQUIRED:
(a)
Post the journal entries to ledger accounts of the three-column running balance
form.
(b)
Prepare a trial balance at December 31.
(c)
Prepare a balance sheet at December 31 2008.
(20 marks)
2.
The trial balance for the year 2008 did not balance. The debit side was more
by Sh35,040 and therefore a suspense account was opened to facilitate the
completion of accounting work at the end of the year. In January 2009 the
following errors made in 2008 were located:
(i)
Shs6,600 received from sale of old equipment had been entered in the sales
account.
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3
(ii)
The purchases day book had been overcast by Shs7,,200.
(iii)
A private purchase of Shs13,800 had been included in the business purchases.
(iv)
Bank charges Shs4,560 entered in the cash book have not been posted to the bank
charges account.
(v)
A sale of goods to Kamau Shs82,800 was correctly entered in the sales book but
entered in the personal account as Shs115,200.
REQUIRED:
(a)
Journal entries to correct the errors.
(b)
The suspense account
(c)
The net profit originally calculated for 2008 was Shs1,364,400. Show your
calculation of the corrected figure of profit.
(20 marks)
3.
The accounts and their balances in the ledger of Kitui Traders on December 31 2008
are as follows:
Shs.
Cash
369,000
Accounts receivable
858,000
Inventory
1,113,000
Prepaid Insurance
95,000
Store supplies
18,000
Office supplies
12,000
Store equipment
846,000
Accumulated depreciation: store equipment
280,000
Office equipment
273,000
Accumulated Depreciation office equipment
120,000
Accounts payable
505,000
Mortgage Note payable
1,000,000
Kamau Capital
878,000
Kamau drawings
400,000
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4
Sales
7,500,000
Sales returns and Allowances
60,000
Sales discounts
35,000
Purchases
5,000,000
Purchase Returns & Allowances
125,000
Purchase discounts
65,000
Carriage Inwards
24,000
Sales salaries expense
600,000
Advertising expense
180,000
Miscellaneous selling expenses
14,000
Office salaries expenses
350,000
Rent expense
100,000
Miscellaneous General Expense
11,000
Interest expense
115,000
Additional Information:
(i)
Inventory as at December 31 was Shs1,050,000
(ii)
Insurance expired during the year Shs36,000
(iii)
Inventory of supplies on December 31
Stores supplies Shs9,000
Office supplies
5,000
(iv)
Depreciate store equipment and office equipment at 10 percent on cost.
(v)
Accrued sales salaries is Shs25,000 and office salaries Shs12,000.
REQUIRED:
(a)
An income statement for the year ended December 31 2008
(b)
A balance sheet as at that date (use the vertical format).
(30 marks)
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