UNIVERSITY EXAMINATIONS: 2021/2022
EXAMINATION FOR THE DEGREE OF BUSINESS INFORMATION
TECHNOLOGY
BUSS 200: INTRODUCTION TO ACCOUNTING II
FULL TIME/PART TIME/DISTANCE LEARNING
DATE: DECEMBER, 2021 TIME: 2 HOURS
INSTRUCTIONS: Answer Question ONE and any other TWO Questions
QUESTION ONE
The trial balance provided below was obtained from sweet bakers industries for the
period ended 31 December 2020.
Additional information
1. Stock in hand as at 31 December 2020
Raw materials 300,000
Work in progress 132,000
Finished goods 312,000
2. Depreciation of 10% on plant and machinery using straight line method
3. 80% of fuel and light and 75% of rent and rates to be charged to manufacturing
4. Doubtful debts provision is 5% of sundry debtors
5. Sh. 48,000 outstanding for fuel and light
6. Rent and business rates paid in advance Sh. 60,000
7. Market value of finished goods is Sh. 4,584,000
Required
i. Manufacturing Statement of Financial Performance showing profit realized on
transfer from the manufacturing department (12 Marks)
ii. Statement of Financial Position 31 December 2020 (8 Marks)
QUESTION TWO
The Following Trial Balance Was Extracted From The Books Of Collins Ltd At 31 December 2020
Share capital authorized and issued:
80,000 ordinary shares of Sh1 each
Freehold premises at cost
Motor vans
Balance 1 January 2020 at cost
Additions less sale proceeds
Provisions for depreciation of motor vans to 1 January
2020
You are given the following information.
i. Stock in trade, 31 December 2020, Sh14,600.
ii. Rates paid in advance as at, 31 December 2020, Sh140.
iii. Debts of Sh1,075 to be written off and the provision to be increased to Sh350.
Required:
1. Prepare a trading and profit and loss account for the year 2020.
2. Balance sheet at 31 December 2020
(15 Marks)
QUESTION THREE
a) Explain the following clauses as used in partnership deed / agreement (4 Marks)
i. Capital contribution clause
ii. Profit or Loss sharing ratio
iii. Salaries to partners
iv. Drawings
B) A partnership made a net profit of Sh. 120,000 for the year ended 31st December 2020. The partners
comprise of Movin and Levin who have the following capital composition:
The following information is also available:
i. The partners agreed to charge interest on capital and on drawings at 8% and 5%
respectively for each of the partners
ii. Salaries to the partners were paid at Sh. 2,000 and Sh.1,800 for Movin
and Levin respectively
iii. The profit sharing ratio was agreed as 3:2 for Movin and Levin respectively
Required:
i. The partnership appropriation account for the year ended 30th June 2020
ii. The current account for the partners (11 Marks)
QUESTION FOUR
The following is the receipts and payments account of the Bull and Push Club for the year
ended 31 December 2020:
n is provided as follows:
ii. On 31 December 2009, the club held investments which cost Sh.58, 500.
During the year ended 31 December 2010, these were sold for Sh.87, 750.
iii. Furniture was valued at Sh.35, 100 on 31 December 2019. On June 2020,
the club purchased additional furniture at a cost of Sh.60, 840. Depreciation
of all furniture is to be provided for at the rate of 10% per annum.
Required:
(a) Prepare an income and expenditure account for the year ended 31
December 2020 (8 Marks)
(b) Statement of Financial Performance as at 31 December 2020 (7
Marks)
