AIR UNIVERSITY SCHOOL OF MANAGEMENT

Mid Term Examination Spring- 2021

Subject: Financial Accounting-2

Semester: BBA-2B & BSAve- 2 Total Marks: 50
Instructor: Bushra Karim Mirza Time Allowed: 2hrs
Weightage: % Code: BA112
Instructions:
 There are 3 sections: Section A, B & C
 Section A to be solved in first 25 minutes on Google form. There will be negative or no
marking for late submission
 Section B & C to be solved in 1 hr and 35 minutes on A-4 size paper
 Paper should be handwritten, typed paper will not be accepted at all.
 Solve each question with all its parts on separate sheet.
 Cutting and overwriting is not acceptable
 2 attempts against single question are not acceptable.
 Use hand held calculator.
 Attempt all question

Section –B
Question-1 Marks-10
a) Your company uses the allowance method to account for uncollectible receivables. At the
beginning of the year, Allowance for uncollectible accounts had a credit balance of $2,300.
During the year you recorded Uncollectible account expense of $4,700 and wrote off bad
Receivables of $2,500. What is your year-end balance in Allowance for uncollectible
accounts? Show by preparing T account

b) Your ending balance of Accounts receivable is $20,500. Use the data in part ‘a’ above and
prepare partial balance sheet.

Section C
Question 2: Marks 15

X Co. Ltd: Assets Management

X Co. Ltd is famous for its hand-made shoes but due to increasing demand company has also
decided to manufacture machine-made shoes and for this company is in process of buying and
managing multiple machines. The company however maintain single account for these machines.
During 4 years the company engaged in the following transactions:
X Co. Ltd. purchased a machine on 1st January, 2008 for Rs 1, 60,000 having useful life of 8 years
company uses straight line method for this. On October 1, 2009 another machine was purchased
for Rs 1,40,000 having 4 year useful life and (total 60,000 miles, 20,000 miles in 1st year, 15 000
miles in 2nd year and 3rd year each, while 10,000 miles in last year). On October 1, 2010 another
machine was purchased for Rs 1, 00,000 having 5 years of useful life and company uses double
declining balance for this. On March 31, 2011 the first machine was sold for Rs 85,000.

Requirement:
 Calculate depreciation of all machines using time line till 31st March, 2011 and record
single transaction for depreciation.
 Prepare machine T .account for the year ending 31st March, 2011
 Prepare partial Balance sheet for the years ending 31st March, 2011

Good Luck