1. A & Co has the following trial balance as at 30 June 20x7.

The financial year end of the A&

C0 is from 1st September 20x6 till 30th June 20x7

Description Dr Cr
Cash and bank balances 4,500
Accounts receivable 6,700
Inventory as at 1st September 20x6 14,500
Sales 80,000
Purchases 45,865
Sales Discount 6,310
Machines as at 1st September 20x6 8,550
Vehicles as at 1st September 20x6 11,950
Land as at 1st September 20x6 80,000
Carriage inward 3,400
Building as at 1st September 20x6 6,500
Accounts payable 16,500
Notes payable 9,500
Loans 15,000
Electricity provisions
Rent payable
Rent expense 8,000
Electricity expense 1,500
Equity 76,775
197,775 197,775
Followings were noted after closing the books of the Company
 Depreciation for fixed assets were not recorded in the above trial balance and depreciation is
charged as follows
o Machine is depreciated on straight line basis of 5 years. (Residual value is KD 2,000
o Vehicles is depreciated on declining method at 20% per annum
o Building is depreciate on straight line over 25 years.
 Gas expenses were of KD 1,500 has not been recorded at all
 Closing inventory of KD 15,850
 Rent expense above are for one calendar year
Required:
1. Prepare the balance sheet as at 30 June 20x7
2. Prepare the Income statements for the period ended 30 June 20x7

2. Record the journal entries for the following scenarios:

A) XYZ Company purchased a building for KD 20,000 on 1 June 20x5 which management elect to record
at fair value. The financial year end is 31 December 20x5. The depreciation is over 10 years. The fair
value is KD 23,000 as of 31 December 20x6. Record the entries for the year end 31 December 20x5 and
31 Dec 20x6.
 3. Company ABC had a receivable of KD 15,000 at the beginning of the year 20x6 and
opening provision of KD 2,500. The management records provision at 5% of the received.
At the end of 20x7 it came to management attention that one of the clients with receivable
exposure of KD 2,000 were recovered. Therefore, the management decided to revise the
provision percentage at 4%. The closing receivable balance was KD 16,000 as of 31
December 20x7.

Required
 Record the general entries of all of the above transactions
 Determine the closing provision amount and addition/reversal for the current year for 20X7 along
with the general entries.

4. Record the following transactions in the Journal entries. The accounting period of the
business is from 1st July 2016 to 30 June 2017

1. John rented a shop on 1 September 2016 with per month rent of KD 2,500 and immediately paid
rent of KD 30,000 in cash to the tenant.
2. John did redecoration of the shop for KD 1,500
3. Bought goods from Karl on credit KD 20,000.
4. Bought furniture on 1st October 2016 for KD 15,000 with the use full life of 4 year.
5. Goods taken by John for personal use KD 3,000.
6. Took loan from Parl KD 30,000, with interest 3.5% on semiannual basis.
7. A fire erupted in the factor, and damaged the good worth of KD 9000. After the assessment by
John these can be sold for KD 1500.

5. Which of the following is/are the example/s of Intangible Asset?

A) Copy rights
B) Good will
C) Patent rights
D) All of the given options

6. Total current assets of the Company is KD 5,000. Total Fixed assets of the Company of the
35,000. Total share capital of the Company is KD 25,000 and accumulated losses are 8000.
Find the liabilities of the Company.
KD 23,000

7. Franchise rights, goodwill and patents are the examples of:

A) Liquid assets
B) Tangible assets
C) Intangible assets
D) Current assets

8. Making an allowance for receivables is an example of which concept?

A Accruals
B Going concern
C Materiality
D Prudence
 9. Which of the following are TRUE of partnerships?
1 The partners’ individual exposure to debt is limited.
2 Financial statements for the partnership by law must be produced and made public.
3 A partnership is not a separate legal entity from the partners themselves.
A 1 and 2 only
B 2 only
C 3 only
D 1 and 3 only

10. Which of the following accounting concepts means that similar items should receive a
similar accounting
treatment?
A Going concern
B Accruals
C Substance over form
D Consistency

11. Which one of the following can the accounting equation can be rewritten as?
A Assets + profit – drawings - liabilities = closing capital
B Assets – liabilities – drawings = opening capital + profit
C Assets – liabilities – opening capital + drawings = profit
D Assets – profit – drawings = closing capital – liabilities

12. A trader's net profit for the year may be computed by using which of the following
formulae?
A Opening capital + drawings – capital introduced – closing capital
B Closing capital + drawings – capital introduced – opening capital
C Opening capital – drawings + capital introduced – closing capital
D Opening capital – drawings – capital introduced – closing capital

13. Which of the following are books of prime entry?

1 Sales day book

2 Cash book
3 Journal
4 Purchase ledger

A 1 and 2 only
B 1, 2 and 3 only
C 1 only
D All of them

14. Bert has extracted the following list of balances from his general ledger at 31 October
20X5:
$
Sales 258,542
Opening inventory 9,649
Purchases 142,958
Expenses 34,835
Non-current assets (carrying amount) 63,960
Receivables 31,746
Payables 13,864
Cash at bank 1,783
Capital 12,525
 15. What is the total of the debit balances in Bert's trial balance at 31 October 20X5?
A $267,049
B $275,282
C $283,148
D $284,931

16. A business sells $100 worth of goods to a customer, the customer pays $50 in cash
immediately andwill pay the remaining $50 in 30 days' time.

What is the double entry to record the purchase in the customer’s accounting records?
A Debit cash $50, credit payables $50, credit purchases $50
B Debit payables $50, debit cash $50, credit purchases $100
C Debit purchases $100, credit payables $50, credit cash $50
D Debit purchases $100, credit cash $100

17. At 31 October 20X6 Roger's trial balance included the following balances:
$
Machinery at cost 12,890
Accumulated depreciation 8,950
Inventory 5,754
Trade receivables 11,745
Trade payables 7,830
Bank overdraft 1,675
Cash at bank 150
What is the value of Roger's current assets at 31 October 20X6?
A $17,649
B $17,499
C $15,974
D $13,734

18. The following information relates to Eva Co's sales tax for the month of March 20X3:
$
Sales (including sales tax) 109,250
Purchases (net of sales tax) 64,000

Sales tax is charged at a flat rate of 15%. Eva Co's sales tax account showed an opening credit balance
of $4,540 at the beginning of the month and a closing debit balance of $2,720 at the end of the
month.

19. What was the total sales tax paid to regulatory authorities during the month of March
20X3?
A $6,470.00
B $11,910.00
C $14,047.50
D $13,162.17

20. Sales (including sales tax) amounted to $27,612.50, and purchases (excluding sales tax)
amounted to $18,000. What is the balance on the sales tax account, assuming all items are
subject to sales tax at 17.5%?
A $962.50 debit
B $962.50 credit
C $1,682.10 debit
D $1,682.10 credit
 21. The closing inventory at cost of a company at 31 January 20X3 amounted to $284,700.

The following items were included at cost in the total:

1) 400 coats, which had cost $80 each and normally sold for $150 each. Owing to a defect in
manufacture, they were all sold after the reporting date at 50% of their normal price. Selling expenses
amounted to 5% of the proceeds.

2) 800 skirts, which had cost $20 each. These too were found to be defective. Remedial work in February
20X3 cost $5 per skirt, and selling expenses for the batch totalled $800. They were sold for $28 each.

What should the inventory value be according to IAS 2 Inventories after considering the above items?
A $281,200
B $282,800
C $329,200
D None of these

22. The carrying value of a company's non-current assets was $200,000 at 1 August 20X0.
During the year ended 31 July 20X1, the company sold non-current assets for $25,000 on
which it made a loss of $5,000. The depreciation charge for the year was $20,000. What
was the carrying value of non-current assets at 31 July 20X1?

A $150,000
B $155,000
C $160,000
D $180,000

23. Banter Co purchased an office building on 1 January 20X1. The building cost was
$1,600,000 and this was depreciated by the straight line method at 2% per year, assuming
a 50-year life and nil residual value. The building was re-valued to $2,250,000 on 1 January
20X6. The useful life was not revised.

The company’s financial year ends on 31 December.

What is the balance on the revaluation reserve at 31 December 20X6?

A $650,000
B $792,000
C $797,000
D $810,000