Pokhara University Old Question Papers | BBA | Financial Accounting I -2020

Pokhara university old question paper bba

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Question Paper in written form:

Pokhara University

Level: Bachelor Semester Year: 2020

Programme: BBA/BI/BCIS/TT Full Marks: 100

Course: Financial Accounting I Pass Marks: 45

Time: – 3hrs.

Candidates are required to give their answers in their own words as far as practicable.

The figures in the margin indicate full marks.

Section ‘A’

Very short answer questions 10×2

Attempt all the questions.

List out different types of assets.
What are different items included in investing activities?
What is the purpose of trial balance?
What are the four basic types of adjusting entries?
Why do firms prepare bank reconciliation statements?
Why do closing entries require?
Rogers corporation stats the year with a Retained Earning balance of Rs: 55,00. Net income for the year is Rs. 27,00. The ending balance in Retained Earnings is Rs.70,000. What was the number of dividends for the year?
The opening stock is Rs. 20,000, purchase during the year is Rs. 1,50,000, a purchase expanse is Rs. 10,000 and closing stock is Rs, 30,000. Find the amount of cost of goods sold.
Shoe the effect on the accounting equation and journal of transaction starting a business with a share capital of Rs. 3,00,000 and bank loan of Rs.1,00,000.
The provision for tax during the year is Rs. 15,000. The tax is payable on the balance sheet decrease by Rs.5,000. Find the amount of tax during the year.

Section ‘B’

Descriptive answer questions 6×10

Attempt any six questions

11. Himalayan Service Company started business on January 1, 2018. The following transaction during the first month of operation, prepare journal entries, T-accounts and Trial balance.

a) Acquired the articles of incorporation and three shareholders introduced Rs.1,00,000 each in exchange of share.

b) Purchased the office building for Rs. 1,50,000 in cash and building is valued at Rs. 1,00,000 and reminder as land.

c) Signed a three-year promissory note at the bank for Rs.1,2,5000.

d) Purchased office equipment at a cost of Rs. 50,000, paying Rs. 10,000 down and agreeing to repay the remainder in 10 days.

e) Paid wages and salaries of Rs.1,30,000 for the first half of the month.

f) Paid the balance due on the office equipment.

g) Sold Rs. 24,000 of advertising during the first month, customers have until the 15^th of the following month to pay their bills.

12. Deuali company was incorporated on 1th January 2018, under a Nepal company Act 2063 that authorized the issuance of 5,000 shares of common stock of Rs. 10 par value. A company provides you the following information as on 31^th December 2018.

Particular	Dr. amount	Cr. amount
Supplies on hind	Rs. 3,280
Equipment	30,000
Cass	27,800
Building	75,000
Account receivables	25,300
Prepaid insurance	6,000
Wages and salaries	3,400
Advertising expenses	1,000
Capital stock		50,000
Accumulated depreciation-equipment		3,000
Accumulated depreciation- building		7,500
Notes payable		20,000
Account payable		37,280
Retained earnings		40,300
Service revenue		13,700
Total	Rs.171,780	Rs.171,780

Additional information:

A count of supplies on hand at the end reveals a balance of Rs.3,000.
The company paid cash on September 1, 2018, for a two-year insurance policy.
Equipment and building depreciate at the rate of 10% per annum.
Wages and salaries due but not paid Rs. 3,500.
The company signed six-month promissory notes on December 1 and the interest rate is 12%.

Required:

Adjustment entries for the above transaction. 2.5
Develop a 10-column worksheet. 7.5

13. The bank statement for Nepal bank Ltd. Shows a balance of Rs. 15,907,45 on April 30, 2019. On this date, the balance as per the book is Rs. 11,589.45. The following reconciling items are determined:

Deposit in transit Rs. 2,201,40.
Outstanding cheques of Rs. 5,904.
A cheque of Rs. 1,226 correctly written by the company and was correctly paid by the bank. But the company recorded it for Rs. 1,262.
Bank debited NSF cheque for Rs. 425,60, bank charge of Rs. 30.
The bank credited note receivable for Rs. 1,000 plus interest earned Rs.50, less bank collection charge of Rs.15.

Required:

Bank reconciliation statement. 8
How much cash balance should be reported on Nepal bank`s April 30, balance sheet? 2

14. A) the following balance sheet items, listed in alphabetical order are available from the record of ABC company at December 31, 2018:

Account payable
Accumulated depreciation-building
Accumulated depreciation- equipment
Bond payable
Capital stock
Equipment
Interest payable
Marketable securities
Notes payable
Paid-in capital in excess of par

34280
40000
12500
250000
200000
84500
2200
15000
6500
75000

Retained earnings
Account receivable
Building
Cash
Income tax payable
Land
Merchandise inventory
Office supplies
Prepaid rent
Salaries payable patent

113510
26700
150000
60790
7500
250000
112900
400
3600
7400
45000

Required: Classified balance sheet.

B. the following income statement items are arranged in alphabet order of ABC company for the year ended 31^th December 2018.

Advertising expenses	1,500	Commission expenses	2,415
Depreciation office building	2,900	Cost of goods sold	29,200
Income tax expenses	1,540	Insurance expenses of sales man	2,250
Interest expenses	1,400	Interest revenue	1,340
Salaries and wage expenses	12,560	Sales revenue	48,300
Supplies expenses	890

Required: Multi-step income statement.

15. What are the different group users of accounting information? Explain their needs of accounting information?

16. What do you understand by “Annual Report” of a company? Briefly explain the major elements of an Annual Report.

17. Discuss about various accounting concepts, accounting principles and accounting conventions.

Section “C”

Rani Traders just completed another successful year, as indicated by the following income statement for 2019:

Rani Traders

Income statement

December 31,2019

Particulars	Amounts (RS.)
Sales revenue Less: Costs of goods sold Gross margin Less: Operating expenses Income before interest and tax Interest expenses Net income before tax Less: tax expenses Net income	12,50,000 700,000 550,000 150,000 400,000 25,000 375,000 150,000 225,000

Comparative balance sheet

Assets	2019 (Rs.)	2018(Rs.)
Cash Account’s receivable Inventory Prepaid insurance	52,000 180,000 230,000 15,000	90,000 130,000 200,000 25,000
Total current assets	477,000	445,000
Land Plant and equipment Accumulated depreciation	750,000 700,000 (250,000)	600,000 500,000 (200,000)
Total long-term assets	12,00,000	900,000
Total assets	16,77,000	13,45,000
Accounts payable Salary payable Income tax payable	130,000 68,000 90,000	148,000 63,000 1110,000
Total current liabilities	288,000	321,000
Long term bank loan	350,000	300,000
Common stock Retained earnings	550,000 489,000	400,000 324,000
Total stockholders` equity	10,39,000	724,000
Total liabilities and stockholders` equity	16,77,000	13,45,000

Other information is as follows:

Divided of Rs.60,000 were declared and paid during the year.
Operating expenses include Rs.50,000 of depreciation.
Land and plant and equipment were acquired for cash, and the additional stock was issued for cash, cash also was received from additional bank loans.

The president has asked you some questions about the year`s results. She is very impressed with the profit margin of 18% (net income divided by sales revenue). She is bothered, however, by the decline in the company`s cash balance during the year. One of the conditions of the existing bank loan is that the company maintains a minimum cash balance of Rs.50,000.

Required:

a) Prepare a stamen of cash flows for 2019using the direct method in the operating activities section.

b) On the basis of your statement, draft a brief memo to the president to explain why cash decreased during such a profitable year. Include in your explanation any recommendations for improving the company`s cash flow in future years.