aiou/b.com/Ad.acc/spr.2012

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ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Commerce)

ADVANCED ACCOUNTING (444)

CHECKLIST

SEMESTER: SPRING, 2012

This packet comprises the following material: -

1. Text book (one)

2. Assignment No. 1, & 23. Assignment forms (Two sets )

4. Schedule for submitting assignments and tutorial meetings

If you find anything missing in this packet, please contact at the address given below:

The

Mailing Officer,

Allama Iqbal Open University

H-8, Islamabad

051-9057611- 12

Muhammad MunirCourse Coordinator


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ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD(Department of Commerce)

[

WARNING1. PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING

THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARDOF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.

2. SUBMITTING ASSIGNMENT(S) BORROWED OR STOLEN FROMOTHER(S) AS ONES OWN WILL BE PENALIZED AS DEFINED INAIOU PLAGIARISM POLICY.

Course: Advanced Accounting (444) Semester: Spring, 2012

Level: BA/B.Com Total Marks: 100Units: 19 Pass Marks: 40

Assignment No. 1(Units: 14)

Note: You are required to attempt all questions if you are unable to understand any

question of assignment, do seek help from your concerned tutor. But keep in

mind that tutors are not supposed to solve the assignment questions for you.

Q. 1 From the following transactions between Ahmad and Raza on account of jointventure business carried out by them in March 2010, show how the account will bemaintained by Raza and how settlement would be made? Also show entries in the

books of Ahmad. The profit and losses are shared equally. (20)

Date Details

March 2nd Ahmad purchased gods worth Rs. 40,000 for the joint venture andspent Rs. 5,000 as freight.

March 5th Raza purchased goods worth Rs. 60,000 for the joint venture and

spent Rs. 3,000 as go down rent.

March 6th Ahmad sold goods for Rs. 40,000.

March 10th Raza sold goods for Rs. 50,000.

March 13th Ahmad sold remaining goods for Rs. 30,000. He paid Rs. 2,000 as

commission to his agent and Rs. 1,000 wages.

March 18th Raza sold goods for Rs. 30,000 and remaining stock of gods wastaken over by for Rs. 5,000.

March 18th Raza paid Rs. 1,500 as wages and Rs. 500 as miscellaneous

business expenses.

March 26th

Ahmad and Raza submitted an account to each other for information.

March 29th

Raza received Rs. 1,000 from Ahmad in settlement of account.


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Q. 2 On January 1, 2010, Hassan of Quetta consigned goods to Ali of Lahore forselling purpose. Ali is entitled to commission of 6% on invoice price and 20%of any surplus price realized. Goods costing Rs. 18,000 were consigned at aninvoice price of Rs. 22,500. The expenses of consignment amounted to Rs.

1,800 were incurred by Hassan. Ali sent an Account Sales showing thefollowing information: He sold 75% of the quantity of goods consigned to himfor Rs. 18,500. He paid freight Rs. 180, insurance Rs. 90 and other expenses

Rs. 230. Hassan drew a bill for Rs. 10,000 on Ali, which was accepted. Ali paidthe remaining balance in cash. You are required to prepare the necessary ledger

accounts in the books of both the parties. (20)

Q. 3 Arif Traders has a branch at Gujrat. The goods are invoiced to the branch atcost plus 20%. The expenses of the Branch are paid from Head Office. The

branch keeps a sales journal and Debtors ledger only. On the basis of thefollowing information, prepare Branch Account as it would appear in the books

of Head Office. (20)

Details Amount (Rs.)

Opening stock (at invoice price) ..................................... Rs.12,000

Closing stock (at invoice price) ...................................... 9,000

Credit sales .................................................................... 20,500

Cash sales ...................................................................... 8,750Receipt from debtors ...................................................... 18,950

Sundry debtors on 31st

December, 2010.... ... ... ... .. ... ... ... .. 4,580

Goods received from Head Office .................................. 15,000

Goods in transit from Head Office on 31st March 2010 ... 1,800

Expenses paid by Head Office for the branch ................. 5,200

Q. 4 Explain the procedure of issuance of shares of a company. Give the accountingtreatment for different steps involved in this procedure with the help of an

example. (20)

Q. 5 ABC Ltd. offered to the public 5,000, 10% debentures of Rs. 100 each at Rs. 105

each. 80% of the issued debentures was underwritten by M/s Stock and Shares withan underwriting commission of 25%. The company received applications for 4,000debentures, which were allotted. Journalise the above transactions in the books ofABC Ltd. (20)


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Assignment No. 2

(Units: 59)

Q. 1 Khawaja Ltd. Was registered with a capital of Rs. 10,00,000 divided into equity

shares of Rs. 10 each. From the following trial balance of Khawaja Ltd., prepare

Profit and Loss account and a Balance Sheet December 31, 2010. (20)

Particulars Rs. Particulars Rs.

Sundry debtors

Closing stock

Fixed assets (at cost):

Furniture

Motor car

Premises

Salaries

Investment in shares (at cost)

Printing and stationery

Postage and telegrams

Motor car fuel

Audit fee

Directors fee

Cash at bank

Cash in hand

134,200

80,000

75,000

22,000

180,500

32,750

15,000

1,020

1,520

5,450

3,100

950

50,247

35,058

Share capital (fully called-up)

Gross profit

Sundry creditors

Dividends

Profit & Loss Account (last year)

Depreciation provisions:

Furniture

Motor car

Premises

400,000

152,500

39,765

1,500

22,030

10,000

6,000

5,000

636,795 636,795

Additional Information:i) Provide 10% depreciation on motorcar, furniture, and premises.ii) Salaries include Rs. 9,000 paid to Managing Director.

iii) Proposed dividend at 12%.iv) Provision for taxation is to be made Rs. 45,000.

Q. 2 Define recapitalization. What are the legal provisions for recapitalization? Discuss

the advantages of recapitalization. (20)


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Q. 3 a) What are the major objectives of ratio analysis? (10)

b) Following is the trading and profit & loss account of Anderson Ltd. (10)

Trading and Profit & Loss Account

Details Rs. Details Rs.

Opening stock

Purchases

Manufacturing Expenses

Gross profit

55,000

125,000

17,500

97,970

Sales

Closing stock

265,000

30,470

295,470 295,470

Office & administrative expenses

Selling & distribution expenses

Preliminary expenses written off

Net Profit

13,200

18,420

4,000

62,350

Gross profit 97,970

97,970 97,970

Calculate:

i) GP Ratio ii) NP Ratioiii) Profit Margin Ratio iv) Inventory Turnover Ratio

Q. 4 What is the difference between Hire-Purchase and Installment Sale? Explain the

accounting procedure for the buyer in installment sale. (20)

Q. 5 Differentiate between operating lease and capital lease. Give accounting treatment

for operating lease in the books of lessor. (20)

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aiou/b.com/Ad.acc/spr.2012