[OBJECTIVE]
Subject: Advanced Financial Accounting-I
Time Allowed: 10 Minutes
Maximum Marks: 10
NOTE: Attempt this Paper on this Question Sheet only. Please encircle the correct option. Division of marks is given in front of each question. This Paper will be collected back after expiry of time limit mentioned above.
Part-I Encircle the right answer, cutting and overwriting is not allowed. (1×10=10)
Bonds with the issuing corporation may pay off before the scheduled maturity date are called:
a) Callable bonds. b) Serial bonds.
c) Convertible bonds. d) Debenture bonds.
Which of the following is not a characteristic of corporate bonds?
a) A highly liquid, transferable investment.
b) Has a specific maturity date.
c) Represents ownership of the issuing corporation.
d) Pays interest, usually semiannually.
When a corporation declares a cash dividend on common stock, which of the following should be excluded in determining the total amount of the dividend?
a) Shares issued in exchange for preferred stock.
b) Shares held by officers and directors.
c) Shares held by other corporations.
d) Shares acquired and held in treasury.
If sales increase by 10% from Year 1 to Year 2 and cost of goods sold increases only 6%, the gross profit on sales will increase by:
a) 4% b) 10%
c) 6% d) Some other percentage.
An acquisition is the same thing as:
a) An amalgamation b) A takeover
c) A merger d) A spin-off
Mybank Ltd merged into Summit Bank, what kind of merger was this? ‘
a) Horizontal b) Vertical
c) Joint venture. d) Conglomerate.
The first item in order of payment to be made by the liquidator is:
a) Secured creditor. b) Preferential creditor.
c) Liquidation expenses d) Debenture holders.
In liquidation process a contributory is:
a) A creditor b) A shareholder
c) A debenture holder d) A liquidator
If the total of the fair value of assets acquired is Rs 100,000 and the amount of purchase consideration paid is Rs 110,000, the difference should be treated as:
a) Loss on acquisition. b) Goodwill.
c) Acquisition expense. d) Negative goodwill.
Which of the following is the method of valuing of shares?
a) Super profit method b) Average profit method
c) Fair value method d) Yield valuation method
[SUBJECTIVE]
Subject: Advanced Financial Accounting-I
Time Allowed: 2 Hours 45 Minutes
Maximum Marks: 50
NOTE: ATTEMPT THIS (SUBJECTIVE) ON THE SEPARATE ANSWER SHEET PROVIDED.
Part-II Give short answers of the following. (20)
Q#1: Define bonus shares.
Q#2: Write down the formula of value of right.
Q#3: Describe the usefulness of statement of cash flow. .
Q#4: What is the formula of calculating the gross profit percentage?
Q#5: What are synergy benefits under amalgamation and absorption?
Q#6: Define negative goodwill.
Q#7: What are main items that appear on the debit side of profit & loss appropriation account?
Q#8: What is the yield valuation method for the valuation of shares?
Q#9: How treasury stock is reported in the stockholders’ equity section of the balance sheet?
Q#10: What are the modes of winding up of joint stock companies?
Part-III Give brief answers of the following. (30)
Q#3: X Company performs adjusting entries every month, but closes its accounts only at year end. The Company’s adjusted tria! balance dated December 31, 2017, appears below. (Bear in mind, the balance shown for Retained Earnings was last updated on December 31, 2016.)
X Company
Adjusted Trial Balance
December 31, 2017
$ $
Cash : 171,100
Account receivable 9,400
Prepaid Rent 3,000 .
Unexpired Insurance 7,200
Supplies 500
Equipment 18,000
Accumulated Depreciation: equipment 7,200
Notes Payable 10,000
Accounts payable 3,200
Salaries Payable 4,000
Income tax payable 6,000
Unearned revenue 8,800
Capital Stock 100,000
Retained Earnings 40,000
Dividends 6,000
Revenue Earned 165,000
Salary expense 85,000
Supply expense 3,900
Rent expense 12,000
Insurance expense 1,900
Advertising expense 500
Depreciation expense- equipment 1,800
Interest expense 900
Income tax expense 23,000
Total 344,200 344,200
Required:
Prepare an Income statement and Balance sheet dated December 31, 2017.
Q#4: A joint stock company was registered with an authorized capital of Rs 5,000,000 divided into 500,000 shares of Rs 10 each. On 1 November 2017 the company issued 350,000 shares with following details:
50,000 shares were issued to promoters towards preliminary expenses.
100,000 shares were issued to directors of the company for cash.
200,000 shares were issued to the general public.
On 20 November 2017, the company received applications for 300,000 shares. Shares were not allotted to applicants of 100,000 shares; therefore their application money was refunded.
Required: Record the above information in the books of the Company and show the figures in the Balance Sheet.
[OBJECTIVE]
Subject: Financial Accounting (Advanced)
Time Allowed: 10 Minutes
Maximum Marks: 10
NOTE: Attempt this Paper on this Question Sheet only. Please encircle the correct option. Division of marks is given in front of each question. This Paper will be collected back after expiry of time limit mentioned above.
Part-I Encircle the correct option, cutting and overwriting is not allowed. (10)
1. A general ledger account that summarizes the content of a specific subsidiary ledger is called as:
a. contra account b. subsidiary account
c. controlling account d. joint account
2. __________ refers to the repeating sequence of transactions by which a business generates its revenue and cash receipts from customers.
a. accounting cycle b. operating cycle
c. profit cycle d. sales cycle
3. The systematic allocation of the cost of a tangible asset to expense during the period of its useful life, is called:
a. depreciation b. amortization
c. depletion d. shrinkage
4. __________ is an obligation to deliver goods or render services in the future, stemming from the receipt of advance payment.
a. prepaid expense b. accrued expense
c. accrued revenue d. unearned revenue
5. Which of the following statements is produced to determine financial position of the business?
a. Statement of owner’s equity b. Statement of financial position
c. Statement of cash flows d. Income statement
6. Planning, controlling, and accounting for cash transactions and cash balances, is called:
a. bank reconciliation b. cash book
c. cash cycle d. cash management
7. Cash and assets convertible directly into known amounts of cash, ate known as:
a. plant assets b. financial assets
c. tangible assets d. intangible assets
8. __________is a method of valuing all units in inventory at the same average per-unit cost, which is recomputed after every purchase.
a. average-cost method b. last-in, first-out method
c. specific identification d. first-in, first-out method
9. Journal entries made at the end of the period for the purpose of closing temporary accounts and transferring balances to the Retained Earnings account, are called:
a. closing entries b. adjusting entries
c. rectifying entries d. reverse entries
10. __________is a generally accepted accounting principle that determines when expenses should be recorded in the accounting records.
a. materiality principle b. realization principle
¢. cost principle d. matching principle
[SUBJECTIVE]
Subject: Financial Accounting (Advanced)
Time Allowed: 2 Hours 45 Minutes
Maximum Marks: 50
NOTE: ATTEMPT THIS (SUBJECTIVE) ON THE SEPARATE ANSWER SHEET PROVIDED.
Part-II Give short details of each of them, each answer carries equal marks. (20)
Q#1: What is meant by Lower-of-cost-or-market (LCM)?
Q#2: Define Intangible Assets.
Q#3: Define Residual value.
Q#4: What is Net realizable value?
Q#5: Define Marketable securities.
Q#6: What is meant by Aging the accounts receivable?
Q#7: Define Straight-line depreciation.
Q#8: Define Bank reconciliation.
Q#9: Define Amortization.
Q#10: Define Periodic inventory system.
Part-III Give brief answers, each answer carries equal marks. (30)
Q#1: Lamprino Appliance uses a perpetual inventory system. The following are three recent merchandising transactions:
June 10 Purchased 10 televisions from Mitsu Industries on account. Invoice price $300 per unit, for a total of $3,000. The terms of purchase were 2/10, n/30.
June 15 Sold one of these televisions for $450 cash.
June 20 Paid the account payable to Mitsu Industries within the discount period.
Instructions:
- Prepare journal entries to record these transactions assuming that Lamprino records purchases of merchandise at:
- Net cost
- Gross invoice price
- Assume that Lamprino did not pay Mitsu Industries within the discount period but instead paid the full invoice price on July 10. Prepare journal entries to record this payment assuming that the origisal liability had been recorded at:
- Net cost
- Gross invoice price
Q#2: The Audiophile sells high-performance stereo equipment. Massachusetts Acoustic recently introduced the Carnegie-440, a state-of-the-art speaker system. During the current year, The Audiophile purchased nine of these speaker systems at the following dates and acquisition costs:
Date Units Unit Total
Purchased Cost Cost
Oct.1 2 $3,000 $6,000
Nov.17 3 3,200 9,600
Dec.1 4 3,250 13,000
Available for sale during the year 9 $28,600
On November 21, The Audiophile sold four of these speaker systems to the Boston Symphony. The other five Carnegie-440s remained at December 31.
Instructions:
Assume that The Audiophile uses a perpetual inventory system. Compute:
(1) The cost of goods sold relating to the sale of Carnegie-440 speakers to the Boston Symphony and
(2) The ending inventory of these speakers at December 31, using each of the following flow assumptions:
- Average cost
- First-in, first-out (FIFO)
- Last-in, first-out (LIFO)
Show the number of units and the unit costs of the cost layers comprising the cost of goods sold and the ending inventory.
[OBJECTIVE]
Subject: Advanced Financial Accounting-II
Time Allowed: 10 Minutes
Maximum Marks: 10
NOTE: Attempt this Paper on this Question Sheet only. Please encircle the correct option. Division of marks is given in front of each question. This Paper will be collected back after expiry of time limit mentioned above.
Part-I Encircle the correct option, cutting and overwriting is not allowed. (10)
1. If the rate of gross profit for department A is 25% of cost, the amount of gross profit on a sale of Rs. I lac will be:
a. Rs. 25,000 b. Rs. 20,000
c. Rs. 33,333 d. None of these.
2. Goods sent by the Head Office to the Branch, not received by the Branch are credited by the Head Office to:
a. Branch account b. Goods in transit account
¢ Trading account d. Profit and loss account
3. When a branch purchases a fixed asset and the asset account is to be kept in the head office branch:
a. Debits Asset account b. Credit Head office account
c. Debit Head office account d. None of these
4. Joint Bank Account is opened:
a. When no separate books for the venture are maintained
b. When separate books for the venture are maintained
c. Under memorandum basis d. Under no circumstances
5. Non-departmental items of expenses are:
a. Charged to Departments on the basis of total sales b. Charged to the General Profit and Loss Account
¢. Charged to Departments according to the fixed assets employed d. None of these
6. Under debtors system branch account is a:
a. Nominal account b. Real account
c. Personal account d. Contra account
7. Work certified is valued at:
a. Cost price b. Sales price
c. Future price d. None of these
8. Amount of bad debts in the absence of del-credre commission is borne by :
a. Consignment b. Consignor
e. Consignee d. None of these
9. In the books of consignee the expenses incurred by him on consignment are debited to:
a. Consignment account b. Cash account
¢. Consignor account d. Expense account
10. In the case of del-credre commission, the liability for bad debts is on:
a. Consignee b. Consignor
c. Principal d. None of these
[SUBJECTIVE]
Subject: Advanced Financial Accounting-II
Time Allowed: 2 Hours 45 Minutes
Maximum Marks: 50
NOTE: ATTEMPT THIS (SUBJECTIVE) ON THE SEPARATE ANSWER SHEET PROVIDED.
Part-II Give short details of each of them, each answer carries equal marks. (20)
Q#1: Define Joint Venture?
Q#2: Define Escalation Clause?
Q#3: What do you mean by del-credere commission?
Q#4: What is the difference between Account Sales and Sales Account?
Q#5: What is sub-contract?
Q#6: What do you mean by independent branches?
Q#7: Define Consignment Inward and Consignment Outward
Q#8: Define two characteristics of financial lease.
Q#9: What is difference between Branch and Department?
Q#10: Give the objectives of departmental account?
Part-III Give brief answers, each answer carries equal marks. (30)
Q#3: Majid Departmental Store has three departments: A, B, C. following data is available with respect to each of the department:
| Departments | A | B | C |
| Opening stock | 6000 | 6000 | 9000 |
| Purchases | 6000 | 6000 | 7000 |
| Sales | 7000 | 7000 | 9000 |
| Closing stock | 6000 | 9000 | 9000 |
The opening and closing stock have been valued at cost. The expenses which are to be charged to each department in proportion to the cost of goods sold in the respective department are as follows:
Salaries Rs. 5510
Rent and rates Rs. 1450
Miscellaneous expenses Rs. 1305
Required: Show the final result and percentage on the sale in each department.
Q#4: From the following details regarding to Multen branch, prepare a Branch Account in respect of 2017.
Q#5: Contractors Ltd. took a contract in 2018 for bridge construction for Rs.5,00,000. At the end of 2018, the company had received Rs.1,80,000 being 90% of the work certified. Certain work not yet certified has cost Rs.5,000. Expenditure incurred were Material Rs. 25,000, Labor Rs.1,50,000, Plant Rs.10,000. Material casting Rs.2,500 was damaged and had to be disposed of for Rs.500, Plant is considered as having depreciated by 25%. Prepare contract account and other relevant ledger accounts. Show your calculation of the profit to be credited to the profit and loss account for the year 2018.
