Advanced Accounting (ACCM3201)
Faculty of Economics and Management Science (FEMS)
Semester: Resit
Level: 300
Year: 2017
Section A; COST ANALYSIS
Question one
HANGA Ltd. Just completed its 2015 operations. For the year, (1) sales are on credits, (2) all
credits to accounts receivables reflect cash receipts from customers, (3) all purchases of
inventory are on credit, (4) all debts to accounts payable reflect cash payment for inventory,
(5) other expense are cash expenses, and (6) any change in income taxes payable reflects the
accrual and cash payment of taxes. HANGA’s balance sheet and income statement are shown
below.
HANGA Ltd comparative balance sheet December 31, 2014 and 2015
2015
000 FCFA
2014
000 FCFA
Assets;
Cash
Account receivable
Inventory
Equipment
Accumulated depreciation, equipment
Total assets
Liabilities and equity
Accounts payable
Income taxes payable
Common stock, 5,000FCFA par value
Paid-in capital in excess of par, common stock
Retained earnings
Total liabilities and equity
58,750
20,222
165,667
107,750,
(46,700)
305,689
20,372
2,100
40,000
68,000
175,217
305,689
28,400
25,860
140,320
77,500
(31,000)
241,080
157,530
6,100
25,000
20,000
32,450
241,080
HANGA Ltd.
Income Statement for the year ended December 31, 2015
Sales
Cost of goods sold
Gross profit
Operating expenses
Depreciation expenses
Other expenses
Income before taxes
Income taxes expenses
Net income
000 FCFA
15,700
173,933
000 FCFA
750,800
269,200
481,600
189,633
291,967
89,200
202,767
Additional information on year 2015 transactions:
• Purchased equipment for 30,250 FCFA cash
• Issued 3,000 shares of common stock for 21 FCFA cash per share
• Declared and paid 60,000FCFA of cash dividends
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
Resit Course: Advanced Accounting: ACCT302
Credit Value:
Course Lecturers:
Time: Course Status: Date:
Venue: Instruction:
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Required: prepare a complete statement of cash flows; report its cash inflows and cash
outflows from operating activities according to the indirect method.
Question two
TEGA, KONDA & KONG are partners sharing profits and losses in the ratio 3:1:1
respectively. On 31/12/2016, their balance sheet was as follows:
Assets Amount Liabilities Amount
Premises
Land
Sticks
Debtors
Cash/bank
85,500
1,453,500
666,900
1,966,500
701,100
Capital account:
TEGA
KONDA
KONG
Loan: KONG
creditors
2,351,250
855,000
1,026,000
128,250
513,000
4,873,500 4,873,500
At this date, the three partners decided to dissolve the partnership under the following
conditions:
• TEGA is to take over the premises at 68,400 FCFA, debtors of 1,710,000 F, and
creditors of 513,000F at the book value.
• KONDA is to take over stocks at 598,500F and part of the land at 615,600F (being book
value less 10%)
• KONG is to take over the other part of land at 90% of the book value.
• The balance of debtors is to be realized at 50% of the book value in cash.
• Dissolution expenses amounted to 21,375F
Required: present the various accounts (realization, capital & cash/bank accounts) necessary
for the dissolution the partnership
Question three (6 marks)
Honest PLC invested 70,000,000F in Bryan Company and controls 40% of its common stock,
on 1/1/2016. As at 31/12/2016, Bryan statement of income shown a profit of 60,000,000F. On
15/3/2017 Bryan declared dividends of 25% of the investment and immediately paid by cheque.
Required: show the treatment of these transactions in the books of Honest PLC using T
accounts
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