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Wednesday, October 27, 2010

Send up questions for VS Niketan College



V.S. NIKETAN COLLEGE
Pokhara University Affiliate
Send-Up Examination-2004
Level: BBA 2nd Semester                                                                                            Full Marks: 100
Subject: Financial Accounting- II                                                                               Pass Marks: 50


QN.1.
a. Why would the company prefer a shorter depreciation period for tax purpose than for financial reporting (book) purposes?                                                                           [7]
b. What are the different methods for treatment of bad debts? How does the % of net credit sales and % of year end accounts recevable approaches differed in terms of their accounting treatment?                                                                                                              [8]

QN.2. a. Following table has been developed to assist you:
                                   





Assets
Acquisition cost
Accumulated depreciation
Book value
A
40,000
–––––
25,000
B
66,000
28,000
–––––
C
–––––
37,500
12,500

Required: 1. Calculate the amount of missing figures
      2. Develop the property plant and equipment category of balance sheet, how the individual assets would appears in balance sheet.
                  3. Prepare the Journal entries to record the sale of assets assuming assets B was sold for Rs.25,000.
     4. Show the effect of required 3 in the accounting equation                               [5×2=10]

b.  B & R enterprise purchased a computer on Jan. 1 2002 for Rs.36,000. The double decline balance method was used for depreciation purposes, with a four years life and a residual value estimate of Rs.5,000.
Required: (a) Calculate the amount of depreciation expenses and book value of computer for 31st Dec. 2002
                  (b)  Prepare Journal entry to record the depreciation expenses.
                  (c)  Show how the computer would appear on the balance sheet on Dec. 31st 2002.                                                                                                       [1+2+2]
QN.3. ‘Kid’s world’ is the retail store of Card; dolls & Gifts items had the following transactions during the year:
a.       Kid’s world purchased inventory on account from a supplier for Rs 80,000. Assume that Kid’s world uses periodic inventory system.
b.      On may 1 apartment was purchased for Rs 5,50,000. A 20% down payment was made & a 18 months 8% note was signed for the remainder.
c.       Kid’s world returned Rs.4,500 worth of inventory purchased in item a, which was found broken when the inventory was received.
d.      Paid the balance due on the purchase of inventory.
e.       On June 1 Kid’s world signed a one year Rs.150,000 note to Union Bank and received Rs.145,000 only.
Requirecd:  (a) Record all necessary journal entries relating to these transactions.
(b) Assume that Kid’s world’s accounting year ends Dec. 31st. Prepare any necessary adjusting entries.                                                                   [10+5=15]

QN.4. Young heart Inc. plans to issue Rs.600,000 face value bonds with a stated interest rate of 8%. They will mature in 5 year. Interest will be paid annually. At the dated of issuance market rate is assumed to be 10%.
            Required:  (a)  Calculate the issue price of bond.
                                (b)  Calculate the premium or discount on issue of bonds.
     (c) Prepare a 5 year amortization schedule for discount or premium as appropriate)
   (d)  Calculate the total cash interest payment & interest expenses.
   (e)  Prepare necessary journal entries for issuance amortization and   payment of interest.                                                                         [3+2+5+2+3=15]

QN.5. Ghana Plaza distributes fine stones. It sells on credit to retail Jewelry stores and extends terms of 2/10, net 30. For accounts that have probability of collecting the receivable as follows?
                                    Not yet due                             100%
                                    One month past due                95%
                                    One to two months                 80%
                                    More than two months            60%
            On Dec. 31st 2002, the credit balance in allowance for doubtful account is Rs.15,300. The amount of gross receivables by age on this date is as follows:
        



Receivable category
Amount
Current (not yet due)
            Past due:
            Less than one month
            One to two months
            More than two months
Rs.  200,000
        
75,000
         50,000
10,000

Required: (a) Prepare a schedule to estimate the amount of uncollectible accounts at Dec. 31st 2002
(b)   On the basis of the schedule in part (a) prepare journal entry on        Dec.31st 2002 to estimate bad debts.
(c)    Show how account receivable would be presented on the Dec. 31st 2002 balance sheet.                                                                      [5×3=15]

QN.6 The following information is available concerning Oshkosh Inc.;
                                                                        units                            unit cost
                        Beginning inventory               200                              $10
                        Purchases:
                           March 5                                300                                11
                          June 12                                  400                                12
                          August 23                             250                                13
                          October 2                              150                                15
Oshkosh, which uses a perpetual system, sold 1,000 units for $22 each during the year. Sales occurred on the following dates:
                                                                        Units
                        February 12                             150
                        April 30                                   200
                        July 7                                       200
                        September 6                            300
                        December 3                             150
            Required:
1. Calculate ending inventory and cost of goods sold for each of the following three methods:
                        a. Weighted Average Cost Method.
                        b. FIFO.
                        c. LIFO.
2. For each of the three methods, compare which of the methods gives a different answer depending on whether a company uses a periodic or a perpetual inventory system?   [15]

QN.7. Write sort notes on: (any two)                                                                                    [5×2=10]
a.      Depletion expenses
b.      Intangible Assets
c.       Deferred Tax


    ***********************************Good Luck********************************




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