yall Saal! fab Open, Faculty of Business Studies B291 Financial Accounting MTA 2019-2020 / Fall Semester 4™ November 2019 (Monday) Number of Exam Pages: 3 Time Allowed: 2 Hours (including this cover sheet) Instructions: 1° Read each question carefully and make sure that you understand it before you begin to answer it. Take about 10 minutes to look through all the questions on the exam and do the ones you are most comfortable with first. 2 This exam consists of THO Compulsory ‘Questions; cach question carries 50% of the marks 3- Programmable and financial calculators are not permitted or to. share, or pass them between each other in an examination. Also, you are not permitted to use calculators with word processing capabilities. {In questions that require calculations, credit will be given for showing your workings,Mr. Yannick has started business as a trader on 1 October 2019. The following transactions and events of trading for his first month are as follows: Date Transaction 1 He sets up a business as a sole trader by introducing $20,000 into a business bank account, 2 He pays rent for a shop, $200 in cash. 8 He purchases delivery van for $1,000 paid in cash. 10 He purchases goods costing $5,000 on credit from Adam (invoice no Adam 123), 12 He sells goods for $5,000 in cash to John, 15 He sells goods for $3,000 on credit to Jack (invoice no Jack001) 24 He pays the amount, taking advantage of a 10% settlement discount with respect to invoice no. Adam123, 25 Jack paid to Mr. Yannick, taking advantage of @ 5% settlement discount with respect to invoice no. jack001 28 He pays energy bill, $600 in cash. 30 He sells goods for $2,500 in cash. Required: I- Enter the above transactions into an appropriate cash book. 2- Post the transactions directly to the appropriate nominal ledger accounts. 3+ Prepare the trial balance as at October 31, 2019. [Marks: (10 + 10 + 6) = 26] Part B A business buys a delivery van for $400,000 on 1* January 2018. Its estimated useful life in the business is 5 years, after which it will be sold for an estimated residual value of $50,000. Required: Prepares tables showing the carrying amounts brought down and carried down and the depreciation expense for each of the six years of useful life using: 1. a. Straight line method of depreciation b. Reducing balance depreciation 2. Assume a business disposed of a delivery van on 1* January 2021 for $200,000. Calculate the loss/gain on the disposal under straight line and reducing balance method. [Marks: (8 +8 + 8) = 24] End of Questions