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ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD (Department of Commerce)

ADVANCED ACCOUNTING (444)

CHECKLIST

SEMESTER: SPRING, 2012

This packet comprises the following material: 1. 2. 3. 4.

Text book (one) Assignment No. 1, & 2 Assignment forms (Two sets ) Schedule for submitting assignments and tutorial meetings

If you find anything missing in this packet, please contact at the address given below:

The Mailing Officer, Allama Iqbal Open University H-8, Islamabad 051-9057611- 12

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Muhammad Munir Course Coordinator


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ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD


(Department of Commerce)
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WARNING
1. 2. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE. SUBMITTING ASSIGNMENT(S) BORROWED OR STOLEN FROM OTHER(S) AS ONES OWN WILL BE PENALIZED AS DEFINED IN AIOU PLAGIARISM POLICY. Semester: Spring, 2012 Total Marks: 100 Pass Marks: 40

Assignment No. 1
(Units: 14) Note: You are required to attempt all questions if you are unable to understand any question of assignment, do seek help from your concerned tutor. But keep in mind that tutors are not supposed to solve the assignment questions for you. Q. 1 From the following transactions between Ahmad and Raza on account of joint venture business carried out by them in March 2010, show how the account will be maintained by Raza and how settlement would be made? Also show entries in the (20) books of Ahmad. The profit and losses are shared equally. Date March 2nd March 5th March 6th March 10th March 13th March 18th March 18th March 26th March 29th Details Ahmad purchased gods worth Rs. 40,000 for the joint venture and spent Rs. 5,000 as freight. Raza purchased goods worth Rs. 60,000 for the joint venture and spent Rs. 3,000 as go down rent. Ahmad sold goods for Rs. 40,000. Raza sold goods for Rs. 50,000. Ahmad sold remaining goods for Rs. 30,000. He paid Rs. 2,000 as commission to his agent and Rs. 1,000 wages. Raza sold goods for Rs. 30,000 and remaining stock of gods was taken over by for Rs. 5,000. Raza paid Rs. 1,500 as wages and Rs. 500 as miscellaneous business expenses. Ahmad and Raza submitted an account to each other for information. Raza received Rs. 1,000 from Ahmad in settlement of account.
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Course: Advanced Accounting (444) Level: BA/B.Com Units: 19

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Q. 2 On January 1, 2010, Hassan of Quetta consigned goods to Ali of Lahore for selling purpose. Ali is entitled to commission of 6% on invoice price and 20% of any surplus price realized. Goods costing Rs. 18,000 were consigned at an invoice price of Rs. 22,500. The expenses of consignment amounted to Rs. 1,800 were incurred by Hassan. Ali sent an Account Sales showing the following information: He sold 75% of the quantity of goods consigned to him for Rs. 18,500. He paid freight Rs. 180, insurance Rs. 90 and other expenses Rs. 230. Hassan drew a bill for Rs. 10,000 on Ali, which was accepted. Ali paid the remaining balance in cash. You are required to prepare the necessary ledger (20) accounts in the books of both the parties. Q. 3 Arif Traders has a branch at Gujrat. The goods are invoiced to the branch at cost plus 20%. The expenses of the Branch are paid from Head Office. The branch keeps a sales journal and Debtors ledger only. On the basis of the following information, prepare Branch Account as it would appear in the books (20) of Head Office. Details

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Amount (Rs.) Rs.12,000 9,000 20,500 8,750 18,950 4,580 15,000 1,800 5,200

Opening stock (at invoice price) ..................................... Closing stock (at invoice price) ...................................... Credit sales .................................................................... Cash sales ...................................................................... Receipt from debtors ...................................................... Sundry debtors on 31 December, 2010.......................... Goods received from Head Office .................................. Goods in transit from Head Office on 31 March 2010 ... Expenses paid by Head Office for the branch .................
st st

Q. 4 Explain the procedure of issuance of shares of a company. Give the accounting treatment for different steps involved in this procedure with the help of an (20) example. Q. 5 ABC Ltd. offered to the public 5,000, 10% debentures of Rs. 100 each at Rs. 105 each. 80% of the issued debentures was underwritten by M/s Stock and Shares with an underwriting commission of 25%. The company received applications for 4,000 debentures, which were allotted. Journalise the above transactions in the books of ABC Ltd. (20)

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Assignment No. 2
(Units: 59) Q. 1 Khawaja Ltd. Was registered with a capital of Rs. 10,00,000 divided into equity shares of Rs. 10 each. From the following trial balance of Khawaja Ltd., prepare Profit and Loss account and a Balance Sheet December 31, 2010. (20) Particulars Sundry debtors Closing stock Fixed assets (at cost): Furniture Motor car Premises Salaries Investment in shares (at cost) Printing and stationery Postage and telegrams Motor car fuel Audit fee Directors fee Cash at bank Cash in hand Rs. Particulars Rs. 400,000 152,500 39,765 1,500 22,030 10,000 6,000 5,000

134,200 Share capital (fully called-up) 80,000 Gross profit Sundry creditors 75,000 Dividends 22,000 Profit & Loss Account (last year) 180,500 Depreciation provisions: 32,750 Furniture 15,000 Motor car 1,020 Premises 1,520 5,450 3,100 950 50,247 35,058

636,795 Additional Information: i) Provide 10% depreciation on motorcar, furniture, and premises. ii) Salaries include Rs. 9,000 paid to Managing Director. iii) Proposed dividend at 12%. iv) Provision for taxation is to be made Rs. 45,000.

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636,795

Q. 2 Define recapitalization. What are the legal provisions for recapitalization? Discuss the advantages of recapitalization. (20)
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Q. 3 a) b)

What are the major objectives of ratio analysis? Following is the trading and profit & loss account of Anderson Ltd. Trading and Profit & Loss Account Details Rs. 55,000 125,000 17,500 97,970 295,470 Gross profit Sales Closing stock Details Rs.

(10) (10)

Opening stock Purchases Manufacturing Expenses Gross profit Office & administrative expenses Selling & distribution expenses Preliminary expenses written off Net Profit

265,000 30,470

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295,470 97,970

13,200 18,420 4,000 62,350 97,970

97,970

Calculate: i) GP Ratio iii) Profit Margin Ratio

ii) iv)

NP Ratio Inventory Turnover Ratio

Q. 4 What is the difference between Hire-Purchase and Installment Sale? Explain the (20) accounting procedure for the buyer in installment sale. Q. 5 Differentiate between operating lease and capital lease. Give accounting treatment (20) for operating lease in the books of lessor.

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