ADVANCED ACCOUNTING 2004 (Private)
Time : 3 Hours Max. Marks:100
Instructions: Attempt any FIVE questions.
1. FINANCIAL STATEMENTS: (20)
Sana LTD. was registered with a Capital 500,000 shares of Rs.10 per. The unarranged Trial Balance at 3l December 2004 was as under:
|Paid up Capital||1800,000|
|Fire Insurance Premium||10,000|
DATA FOR ADJUSTMENT ON 31-12-04
1. Merchandise Inventory valued at Rs.140,000.
2. Salaries unpaid amounted to Rs.10,000
3. Accrued Utility Expenses Rs.5000
4. One-fifth of Insurance Premium is unexpired.
5. Provide Depreciation on Furniture 20% and on Building at2%
6. As per Board of Directors approval.
(i) Reserve for Income Tax @ 10% of Net Income.
(ii) Reserve for contingencies
(iii) lnterim Dividend declared @ 10% of paid up Capital.
(i) Income Statement
(ii) Retained Earning Statement
(iii) Balance Sheet.
2. FINANCIAL STATEMENT ANALYSIS: (20)
Following are the selected Balances taken from the Books of Annie LTD. at the end of 2004.
Cost of goods sold 270,000
Accounts Payable 100,000
Merchandise Inventory (1.1.04) 60,000
Bills payable 250,000
Accounts Receivable (1.1.04) 190,000
Marketable Securities 71,000
Notes payable 15,000
Accounts Receivable (31.12.04 175,000
Credit Sales (Net) 912,500
Merchandise Inventory (31 .12.04) 75,000
On the basis of above information, Compute:
(1) Current Ratio (2) Acid Test Ratio
(3) Inventory Turnover (4) A/c. Receivable Turnover
(5) Net Profit Percentage. (6) Gross Profit Percentage.
(7) Average days to A/c. Receivable & Inventory Turnover.
Note: Computation without the use of relevant Formula will not be accepted.
FUND & CASH FLOW ANALYSIS: (20)
The comparative Balance Sheet of Sumera Ltd. are reproduced below:
|DEBIT BALANCES (in Rs.)||2004||2003|
|Plan & Machinery||880,000||830,000|
|CREDIT BALANCES (In Rs)|
|Paid up Capital||1200,000||1130,000|
(1)Net Income for the year 2004, Rs.120,000
(2) Declared Cash Dividend Rs.90,000.
(1) Working Capital for both the year.
(2) Statement showing Changes in Working Capital
(3) Determine Cash flow from operating activities.
4. ACCOUNTING FOR BRANCH: (20)
On 1 October 2004, Fahad Traders of Karachi opened a Branch atIslamabadby sending goods at a Billed Price of Rs.270,000. On 151h Nov. additional shipment was made at a billed price of Rs.108000. On 20th Nov. the Branch returned goods worth Rs.8,000.
On 31st Dec., 2004, the Branch reported a Net Loss of Rs.15,600 and goods unsold (inventory) at Billed price of Rs.90.000. The Head office invoices goods at 25% above cost
(1) Show over-valuation Adjustment with necessary computation in the Head Office Books.
(2) Record the above transactions (including incorporation of Branch Profit) Loss and Over-valuation Adjustment) in the Head Office Journal.
5. COMPANY ACCOUNTING- AMALGMATION:
The respective Balance sheets of Fiza Ltd and Aimen Ltd stood on 31. Dec. 2004. as under:
|ASSETS (In Rs.)||FizaLtd.||Aimen Ltd.|
|Plant & Machinery (Net)||650,000||800,000|
|Profit and Loss||50,000|
|EQUITIES (In Rs.)||Fiza Ltd.||Aimen Ltd.|
|Share Capital (in Rs.10 share)||1500,000||2500,000|
1st January 2005, both the companies agreed to amalgamate. A new company Nadeem Ltd. was formed with an authorized Capital of Rs.50,00,000 (divided into 500,000 share of Rs.10 each) to take over Assets and Liabilities of both the concerns at Book Values with the exception of Buildings which were taken at 20% more than their Book values:
(1) Compute the amount payable to each company and Number of shares to be issued to the Share holders of the liquidation Companies.
(2) Journal Entries in the Books of Nadeem Ltd.
(3) Prepare initial Balance sheet of Nadeem Ltd.
6. ACCOUNTING FOR INSTALLMENT SALES
Nizam Sons use Perpetual inventory system for recording Merchandise. Summarised data for the year 2004 are as under:
1. Sales made on Installment basis 500,000
2. Collection from Installment AIR 200,000
3. Operating Expenses paid 32,Q00
4. Operating Expenses payable 3,000
5. Cost of installment sales 400,000
6. Installment A/c. Receivable cancelled 30,000
7. Repossessed goods valued at 22,090
(a) Calculate Gross profit rate
(b) Find out Loss/gain on repossession.
(c) Pass Journal Entries for recording the above transactions including Adjusting and closing Entries.
7. CONSIGNMENTS ACCOUNT: (20)
NOT INCLUDED IN THE NEW COURSE
8. ACCOUNTING FOR INCOMPLETE RECORDS:
NOT INCLUDED IN THE NEW COURSE
9. DISTINGUISH BETWEEN (ANY TWO) (20)
1. Joint Venture and Consignment.
2. InstallmentSaleand Hire Purchase.
3. Amalgamation and Absorption of Companies.