Advanced Accounting (ACCM3201)
Faculty of Economics and Management Science (FEMS)
Semester: Second Semester
Level: 300
Year: 2018
Section A; COST ANALYSIS
FILE ONE:
Question one. (20mrks)
On the 01/01/2015, ALPHA PLC was constituted, and a public offer of ordinary share was
made. The detail of the offer was as follows
1- 1,000 debenture shares of 10,000frs each payable in instalments as follows;
• On application, 3000 fcfa per share
• On allotment, 4000 fcfa
• On the 1
st
and final call, 5000 fcfa. This included a premium worth 205 of the
nominal value;
2- 1,500 applications were received from aspiring shareholders on 01/02/2015 and the
company board of directors decided to deal with them as follows:
- To make a refund of money for 500 applications, this was done on
01/03/2015
3- To allot the remaining shares applied for based on 1 share for every 1 applied for, on
the 01/05/2015:
4- Money requested for the first and final call was all paid for except for a holder of 50
shares on 01/07/2015
5- A resolution was passed by the board of directors on the 01/08/2015 to forfeit the 50
shares. The forfeited shares were later issued to Mr, John at 9,500frs each on the
01/09/2015
Work required
a) What is the gain realized by the company after the reissue of shares to Mr. John? 3pts
b) Show the journal entries for the above transactions, if the first applicant was
reimbursed a balance after deducting all expenses on reissue 15 mks
c) Present the new balance sheet of ALPHA PLC after the above transactions 2 mks
Question two (15 MKS)
ABAM, BANDE and CHI entered into a joint venture on January 1, 2017. ABAM and
BANDE were both to supply some of the raw materials used for production, while only
BANDE and CHI would sell the finished goods. Profits or losses was to be shared in the ratio
3;2;1 respectively. The following transactions took place there after:
ABAM supplied raw materials amounting costing 450,000frsa
BANDE supplied raw materials costing 300,000frs
ABAM paid wages worth 180,000frs
ABAM paid storage expenses 40,000frs
BANDE paid carriage 90,000frs
CHI paid selling expenses 120,000frs
BANDE received cash from sales 800,000frs
CHI received cash from sales 1,100,000frs
Work required;
1) Show the accounts that will appear in the books of ABAM, BANDE and CHI
2) Prepare the memorandum joint venture account for the above transactions.
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: 2018
Venue: Instruction:
www.schoolfaqs.net
FILE TWO
Question 3 (10 mks)
HONEST PLC invested 70,000,000frs in BRYAN PLC and controls 40% of its common
stock on the 1/01/2016. As at 31/12/2016, BRYAN PLC statement of income shows a profit
of 60,000,000fcfa. On 15/03/2017 BRYAN PLC declared dividends of 25% of investment
and immediately paid by cheque.
Required: show the treatment of these transactions in the books of HONEST PLC using T
accounts
Question 4 (25 marks)
The statement of financial position of PANDA and SANO companies as at 31/12/2012 were
as shown below:
descriptions PANDA company 000fcfa SANO company 000fcfa
Cash 100,000 20,000
Other current assets 180,000 50,000
Plant and equipment 120,000 40,000
Land 20,000
Total assets 400,000 130,000
Liabilities 60,000 50,000
Common stock 10,000 fcfa 200,000 50,000
Other contributed capital 40,000 10,000
Retained earnings 100,000 20,000
Total equity 400,000 130,000
On the 1/01/2013 PANDA company acquired 4000 shares (80%) of the outstanding common
stock of SANO company at 74,000,000frs cash. Any differential arising from the acquisition
should be assigned to undervalued land. Within the year 2013, PANDA transferred
equipment to SANO at 40,000,000frs the equipment had cost in PANDA 32,000,000frs and
is depreciated at 25% linearly. SANO also took a short-term loan from PANDA of
12,000,000frs within the year.
Work required:
a) Determine the differential at the date of acquisition. (5mks)
b) Prepare the consolidated statement of financial position work as at date of acquisition
(13mks)
c) Show journal entries for re4cording investment and elimination entries for
consolidated elements. (7mks)
www.schoolfaqs.net
