Advanced Accounting (ACCM3201)
Faculty of Economics and Management Science (FEMS)
Semester: Second Semester
Level: 300
Year: 2017
Section A; COST ANALYSIS
Question 1 (25 marks)
DALLAS PLC was formed on 1/1/2015 with an authorized capital f 1,200,000,000F ordinary
shares of 20,000F each. It issued to the public 16,800 shares at 24,000F per share, payable as
follows:
• 5,000F per share on application
• 10,000F per share on allotment on 21/01/2015
• The balance on call on 1/04/2015
The issue was fully subscribed and paid for by cheque. The company also agreed to take over
the assets except bank balance and debtors of a partnership owned by Abanda and Ntumba. On
31/04/2015, the balance sheet of the partnership was as follows;
premises 122,000,000 capital account:
plant and machinery 204,000,000
•
Abanda 240,000,000
furniture and fitting 40,960,000
•
Ntumba 160,000,000
stocks 152,560,000 Abanda 's current account 5,000,000
debtors 130,720,000 Ntumba's current account 6,760,000
bank 66,080,000 creditors 304,560,000
total 716,320,000 total 716,320,000
The deal was concluded on 1/05/2015. The purchase consideration was fixed at 680,000,000F
to be settled as follows; issue of 26,000 ordinary shares credited as fully paid and 160,000,000F
by cheque. The partnership will pay its debts. All assets are taken over at their book values.
NB; each collection for the issue of 16,800 shares should be shared between ordinary share
capital and issue premiums in their respective proportions.
Required:
1. Record the issue of 16,800 shares and the taking over of the partnership in the journal of
DALLAS Plc.
2. Present the balance sheet of the DALLAS Plc. after the transactions.
Question 2 (10 marks)
AARON Plc. invested 40,000,000FCFA in CADIUN Company and controls 45% of its
common stock, on 1/1/2012. As at 31/12/2015, CADIUM statement of income shown a profit
of 50,000,000F. On 15/3/2013, CADIUM declared dividends of 20% of the investment and
immediately paid by cheque
Required: show the treatment of these transactions in the books of AARON Plc. using T-
accounts
THE UNIVERSITY OF BAMENDA
FACULTY OF ECONOMICS AND MANAGEMENT SCIENCES
2
nd
Semester Exam Course: Advanced Accounting: ACCT302
Credit Value:
Course Lecturers:
Time: Course Status: Date:
Venue: Instruction:
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Question 3 (20 marks)
Information from the December 31
st
: 2016 and 2015 balance sheets of Savage Corporation are
presented below:
item 2016 000F 2015 000F
cash 30,000 50,000
account receivable, net 410,000 460,000
inventory 300,000 320,000
prepaid expenses 20,000 15,000
long-term investments 50,000 25,000
land 560,000 300,000
buildings and equipment 2,000,000 1,900,000
accumulated depreciation -800,000 -770,000
2,540,000 2,250,000
accounts payable 300,000 120,000
accrued liabilities 40,000 50,000
bonds payable 500,000 800,000
long-term note payable 150,000 0
common stock, 2,000F par value 200,000 160,000
paid-in capital in excess of par value 710,000 550,000
retained earnings 670,000 620,000
2,570,000 2,300,000
Additional information about 2016 transactions and events
a) Net income was 110,000,000F
b) Depreciation expense on buildings and equipment was 60,000,000F
c) Sold equipment with a cost of 50,000,000F and accumulated depreciation of 30,000,000F for
cash of 17,000,000F
d) Declared and paid cash dividends of 60,000,000F
e) Issued a 150,000,000F long-term note payable for buildings and equipment
f) Purchased long-term investments for 25,000,000F
g) Paid 300,000,000F on the bonds payable.
h) Issued 20,000shares of 2,000F par value common stock for 200,000,000F
i) Purchased land for 260,000,000F
Required: prepare the statement of cash flow of Savage Corporation using the indirect method.
Question 4 (15 marks)
The statements of financial position of Aaron and Buri companies as at 1/1/20x1 are shown
below;
Aaron
(000F) Buri (000F)
assets:
cash 50,000 6,000
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account receivable 7,000 5,000
inventory 10,000 8,000
land 25,000 7,000
building and equipment 60,000 20,000
accumulated depreciation -20,000 -8,000
total assets 132,000 38,000
liabilities and equity
account payable 10,000 3,000
bond payable 23,000 5,000
common stock 80,000 20,000
retained earnings 20,000 10,000
total 133,000 38,000
Aaron purchased all Buri’s outstanding capital stock for 45,000,000F cash on 1/120x1
Required:
Show the analysis of the acquisition and the consolidated statement of financial position
worksheet immediately after acquisition. Any differential should be allocated to land
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