AMINATION , : BUSINE: es ae SUBJECT: GE 01, FUNDAMENTALS OF FINANCIAL ACCOUNTING Total Marks: Time Allocated: Three hours Instructions to Candidates You are required to answer ALL question: Answers should be properly structured) relevant and computations ne shown. f estion requirements You are strongly advised to carefully read ALL the q jestions). attempting the question concerned (that is all parts and/or sub-qu ALL answers must be written in the answer b paper will not be submitted for marking: ook. Answers written on the question 100 to be before Start answering each question from a numbered with the sub-question numbe which sub-question you are answering. No of questions | No of sub-questions Marks allocation fresh sheet, Your answers should be clearly then ruled off, so that the markers know ‘i Paras Question 1- 6 = 10 marks each gamur Question 7-8 = 20 marks each TURN OVER= Ret oe * estion 1- 6 (10 marke par each) and 96 nilniles = / 'You are advised to spend 18 minutes Question (20 marks per each). oy ‘QUESTION 1 (@) ‘Cash fact and profit is an opinion’ (®) Explain ‘Going Concern Assumption’ a Accounting. : you agree? Explain, d ‘Matching Principle’ from Conceptual Framework of [Marks: (5+5) = 10) QUESTION 2 (2) What are the components of a complete set of financial statements as defined in IAS -17. (©) Select the assumption, principl st t riately justifies the following Procedures and pracices Ps OF Constraint that most appreps (1) "Fair value changes an : counting record (2) Intangible assets are ee Dee ever Potlogs Banetted (9) The use of consolidated statement ishustliod (4) All payments out of Pelly Cash are charged to Miscellaneous Expense. ev [Marks: (644) = 10) STION 3 {8) Identify components of an effective intemal contol system (0) AB Company has the following items in ts fnaneial evords. Cash in bank Tk.42,000 Cash in plant expansion fund Tk 100,000 Cash on hand Tk.12,000 Highly liquid investments Tk 34,000 Petty cash Tk.500 Receivables from customers Tk.89,000 Stock investments Tk.61,000 The highly liquid investments had maturities of 3 months or less when they were purchased, The stock investments will be sold in the next 6 to 12 months. The plant expansion project will begin in 3 years. Required: What amount should AB report as "Cash and cash equivalents’ on its statement of financial position? (Marks: (5#5) =10) QUESTION 4 (a) Issuance of general shares to public or issuance of right shares- When one i more preferable to existing shareholders and why’ Describe redeemable shares, bonus shares and convertible debts, (b) (Marks: (446) = 19) 5 . pr ie sig entry may affect more than one balance sheet or income siatement account 0 2 ce 9 Why or why not Do you agree in the process of preparing its financial statements for the year end. (b) Holtzman Compa re eeume that no enties for depreciation have been recorded in mae. December = oration related to depreciation of fixed assets is provided to you, The follo . ae2 \ - 6 . . loltzman, ~ €Quipment nag 3S eaulpmer Required: (i) Prepare the bank reconelli (ii) Prepare the net ou e nt on J coupe deca sya al » Meat aaa otmation, the conpanyaeenn (2) noite rt 2 308 ei valle ae wachine : Saran alte of Tk. 16,000 a Gea (3) Buring 201 ‘Preciation in 2013 and 2 but the seco", Holtzman changed from heed years i els: petal The builds ee ally ee A both bases for 2013 aa ne 2014 2013 Stieiaht ine Tk.27,000 7k.27,000 Deciining-balance 48,000 60,000 Required: Prepare the j ie journal entries to record i di tovdate felated'to Remeseneten cae decal expense for 2015 and correct any err ors made QUESTION 6 [Marks: 2+(3+3#2) =10] eee! 31, 2014, Reber Company had a cash balance per books of 7k.6,781.50. The bank 2 ont from New York State Bank on that date showed 3 balance of Tk.6,404.60. A my T a Oy ‘statement with the Cash account revealed the following facts. ie setenen included @ debit memo of Tk.40 for the printing of additional company (2) Cash sales of Tk.636.15 on May 12 were deposited in the bank. The cash receipts journal entry and the deposit shp were Incorrectly made for 1k.886.15. The bane credited Reber Company for the correct amount. 30) (3) Outstanding checks at May 31 totaled or aia76 25. Deposits in transit were TK2,416.15, (4) On May 18, the company issued check No. 1181 for Tk.685 to Lynda Carsen on account. The check, which cleared the bank in May, was incorrectly journalized and posted by Reber Company for Tk 658. (6) A Tk3,000 note receivable was collected by the ©: plusTk.80 interest. The bank charged a collection ank for Reber Company on May 31 fee of Tk.20. No interest has been accrued on the note. (6) Included with the Cancelled checks was @ check issued by Stiner Company to Ted Cress for Tk.800 that was incorrectly charged to Reber Company by the bank. (7) On May 31, the bank statement Showed an NSF charge of Tk.680 for a check issued py Sue Allison, a customer, to Reber Company:on account. iation (corrected balance) at May 31, 2014. cessary adjusting entries for Reber Company at May 31, 2014. [Marks: (5+5) = 1 TURN O\QUESTION 7 - On December id 2014, MMY Distributing Company had the following account balances. Debit Credit Cash Tk.7,200 | Accumulated Depreciation—Equipment, | Tk.2,200 Accounts Receivable 4600) Accounts Payable 4,500 Inventory. 12,000 | Salaries and Wages Payable 7 1,000 Supplies ~ 1,200 | Owner's Capital [39,300 eauipment== 22,000 I : TkAa7,000 [7k47,000 During December, the company completed the following summary transactions, Dec. 6 Ba ia imiegieon! for salaries and wages due to employees, of which Tk.600 is for cee re Tesco is for November salaries and wages payable. pea eee teed Te eet from cusiomers in payment of account (nic discount allowed), POG eka ercies fer cash Tk.6,300, The cost of the merchandise sold was Tk,4,100. 1ased merchandise on account from Maglio Co. Tk.9,000, terms 2/10, n/30. 15 Purchased supplies for cash Tk.2,000. 48 Sold merchandise on account Tk.12,000, terms 3/10, n/30. The cost of the Merchandise sold was Tk.8,000. 20 Paid salaries and wages Tk.1,800. mv t> 4" Veo 23 Paid Maglio Co. in full, less discount. 27 Received collections inal less dacouns, rom customers biled on December 18, Pi awe -Da . Adjustment data: (1) Accrued salaries and wages payable Tk.800. (2) Depreciation Tk.200 per month (3) Supplies on hand Tk. 1,500. Required: (i) Journalize the December transactions using a perpetual inventory system. (ii) Prepare an adjusted trial balance. (ii) Prepare an income statement for the month ending December 31, 2014 and a classified ‘statement of financial position at December 31, 2014, [Marks: (9+3+8) = 20] QUESTION & The statement of financial positi recent income statement are set out below. Florian’s Income Statement for the Year ended on 31 Dec 2017 ion of Florian’s Ltd. for the past two years and the company's Item __| Amount(Tk.) Amount(Tk.) | Sales Revenue 640,000 | COGS (210,000) | 1 Gross Margin | 4,30,000 | Distribution Expenses (20,000) [Administrative Expenses (25,000): [Administrative and Distribution Expense (45,000) | Operating Profit” 2 3.85,000 Interest Received a 5,000 Interest Paid cs (12,000) Earnings Before Taxes 378,000 income Tax Expenses (831000) Earnings After Tax __= 345,000: TURN OVER page 4ofS31.12.2017 32,000 + Prepaid Insurance on Bank Balance ae Current Assets 2. Total Assets. | share Capital 420,000 100,000. Share Premium 000 45,000 Retained Earnings (6.0m ‘Owner's Equity 496,000. 433,000 | Loans 150,000 | _ 420.000 | Non-Current | } Liabilities 450,000 420,000 | Trade Payable 30,000 43,000 | Salaries Payable 37,000 29,000 \ _ [income Tax 16,000 7,000 | a Current Liabilities: 83,000 | 49,000 729,000 302,000 | Additional Information: (1) The Entity sol Tk.10,000. The (2) The Cost of Goo Current Assets, () Dividends paid during th Required: Prepare a statement of id some tangible Gost of Goods Sold (COS: ds Sold is calculated alte! *END OF 1e year was Tk.5,000. non-current assets. which had a net book value of 'S) includes a loss of Tk.1,000 related to that. charging the depreciation of Tk.2,000 on Non- f cash flows using indirect method as per |AS-7. {Marks: 20] ESTION PAPER*