Advanced Accounting Guess Paper 2011-2012
SECTION A: ADVANCED ACCOUNTING
Q. Accounting For Companies:
The following are the balance sheet accounts of Rasheed Co. Ltd. as on 30th June 2007:
DEBIT:
Cash 21,000
Account receivable 73,000
Merchandise inventory 61,000
Preliminary expense 2,000
Retained earning 85,000
Deficit 85,000
Patents 16,000
Total: 342,000
CREDIT:
Account payable 40,000
Bank overdraft 52,000
Share capital:
25000 ordinary shares of Rs.10 = 250,000
The Company proved unsuccessful and resolutions were passed to carry out the following scheme of reconstruction by reduction of capital:
(1) That the ordinary shares be reduced to an equal number of fully paid shares of Rs.5 each
(2) That the amount so available he utilized for wiping out losses and reduction of assets as follows:
Preliminary expenses and retained earnings accounts Dr. Balances) to be written off entirely. The plant & machinery be reduced by RS.8000. The merchandise inventory be written down by Rs.6000. Make provision for bad debts Rs.8000. The patent to be completely written off.
Required: (1) Make necessary journal entries in the books of the company to implement the above scheme of reconstruction.
(ii) Prepare the balance sheet (revised).
Q.2 Analysis of Financial Statement:
The data given below were taken from the Financial statement of Hamza for years 2010 & 2011
2010 2011
Current assets 220,000 264,000
Current liabilities 165,000 140,000
Cash sales 200,000 300,000
Credit sales 450,000 560,000
Cost of good sold 450,000 500,000
Merchandise inventory 95,000 106,000
Quick assets 70,000 75,000
Account receivable 60,000 66,000
Required: Compute the following for 2010 and 2011.
(a) Amount of working capital.
(b) Current ratio.
(c) Days to inventory turnover.
(d) Quick ratio.
(e) Days in receivable turnover.
(f) Rate of gross profit on sales
(g) Days of operating cycle in 2011 only.
Q-3 Accounting for installment Sales
The following transaction relates to Al-Abid Co. for 210 which follow the perpetual inventory system and FIFO method for valuation of inventory. Opening inventory consist of 50 machines @ Rs.560 per machine. They completed the following transactions:
(1) Purchase 350 machines @ Rs.600 per machine on account.
(2) Sold 250 machines @ Rs.1000 each on installments.
(3) Received down payment @ Rs.20 per machine on all the sold machines.
(4) Received 996 installments @ Rs.100 per installment.
(5) Repossessed new machine from a customer who had paid only down payment having market value of Rs.500.
Required:
Journal entries including adjusting and closing entries. Show all computation.
Q.4 Cash flow Statement.
On December 31, 2010 and 2011 balance sheet of Adeel Ltd. shows the following:
Assets:
Cash 7,000 4,800
A/c. receivable 8,500 9,500
Merchandise inventory 32,500 33,200
Equipment 30,100 24,000
Total: 78,100 71,500
Equities: 4,800
Accumulated depreciation — equipment 6100
A/c. payable 16,800 19,400
Mortgage payable 6,000 10000
Share capital Rs.10 per share 30,000 25,000
Share premium 2,500 –
Retained earnings 16,700 12,30
Total: 78,100 71.500
Additional information:
(1) A fully depreciated equipment that costs of Rs.800 was discarded and related, accounts were closed-
(2) Cash dividend of Rs.4,000 were declared and paid.
Required: Prepare a cash flow statement showing operating, investing, financing activities.
Q.5 Accounting for Branch:
On January 1, 2010 Noman Company ofKarachiopened a branch atMultan. Following is the information for the month of January
2010:
(1) Sent merchandise to branch at billed price of Rs.96, 000.
(2) During the month additional shipment was made at billed price of Rs.60, 00.
(3) Branch returned merchandise of billed price Rs.4, 800 during January.
(4) At the end of January the inventory (at billed price) held by branch amounted to Rs.30, 000.
(5 Branch reported net profit of Rs.4, 000 for the month.
The head office followed the practice of billing the branch at 20% above cost of merchandise.
Required:
(i) Give journal entries in the books of head office including adjustment of over valuation.
(ii) Give journal entries in the books of Multan Branch.
Note: Where computation of over valuation is required entries without computation will not be accepted.
