Final on Tracing 18-7-2014

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Commerce)

ADVANCED ACCOUNTING (444)

CHECKLIST
SEMESTER: AUTUMN 2014

This packet comprises the following material:

1. Text Book (One)
2. Assignment No. 1 & 2
3. Assignment Forms ( 2 sets )
In this packet, if you find anything missing out of the above-mentioned material,
please contact at the address given below:

Mailing Officer
Allama Iqbal Open University
H-8, Islamabad
Ph: 051-9057611-12
Muhammad Munir Ahmad
(Course Coordinator)

ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD

(Department of Commerce)
WARNING
[

1.
2.

PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING

THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD
OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
SUBMITTING ASSIGNMENTS BORROWED OR STOLEN FROM
OTHER(S) AS ONES OWN WILL BE PENALIZED AS DEFINED IN
AIOU PLAGIARISM POLICY.

Course: Advanced Accounting (444)

Level: B.Com/B.A

ASSIGNMENT No. 1

Semester: Autumn 2014

Total Marks: 100
Pass Marks: 40

(Units 14)

Note: You are required to solve 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 Ali and Wali contribute Rs. 400,000 and 300,000 respectively for the construction
of a Computer Lab in Regional Campus Multan of AIOU, under joint venture
arrangements. They open a Joint Bank Account and deposited all the amount of
their contribution. The accepted contract price for the Lab is Rs. 950,000. The
profit & loss is shared in the ratio of contribution by the co-ventures. Their
transactions of the March 2014 are as follows:
Purchase of construction material
Rs. 650,000
Purchase of various small items
65,000
Wages of Labour paid by Ali
150,000
Goods supplied by Wali
20,000
The Project was completed and the contract price duly received. Before closing of
joint venture books materials worth Rs. 36,000 were taken over by Ali.
Required: Enter the above transactions in the books of both Ali and Wali and also
in the separate books of joint venture.
(20)
Q. 2 On 15th March, 2014 Hammad & Co. of Rawalpindi consigned 1000 cases of milk
powder to Jawad & Co. of Jhelum, invoiced at Rs. 200,000 which was 25 above
their cost price. Hammad & Co. paid Rs. 12,000 as insurance. On 1 st June, Jawad &
Co., paid carriage inward Rs. 20,000, Unloading Charges 4,000 and sent to the
consignors a bank draft for Rs. 80,000 as advance. On 1 st August, 2014, they sold
800 cases for Rs. 210,000. The consignee is entitled to a commission of 8 percent
on the invoice price and 20 percent of any surplus price realized. Jawad & Co.
enclosed a bill at 2 months for the amount due.
Required: Show the Transactions and necessary accounts in the books of
Consignor and Consignee.
(20)

Q. 3 What is meant by Departmental Accounts? Describe the objectives and advantages

of preparing departmental accounts?
(20)
Q. 4 From the following particulars, Prepare Branch Account showing the profit or
loss of the Branch.
(20)
Opening stock at branch
Rs. 300,000
Goods sent to branch
900,000
Sales (Cash)
1,200,000
Salaries
100,000
Other expenses
40,000
Closing stock could not be ascertained, but it is known that the branch usually sells
at cost plus 20 per cent. The branch manager is entitled a commission of 5 per cent
on profit of the branch before charging such commission.
Q. 5 Green Ltd. Issued 4,000 6% Debentures of Rs. 100 each at Rs. 105. The debenture
holders had the option of converting within one year, debentures into Ordinary
Shares of Rs. 100 each at Rs. 125.
(20)
At the end of the 1st year the interest on debentures was outstanding. Holders of
200 debentures decided to take advantage of the option. Give journal entries and
show the Balance Sheet of the company.

ASSIGNMENT No. 2
Units (59)
Total Marks: 100
Pass Marks: 40
Q. 1 The accounts of a limited company disclose a net profit of Rs.800,000 for the year
ended 31st December, 2013. The balance of profit brought forward from 2012 was
Rs.31,000. The shareholders in the annual general meeting resolved that (a) a
dividend of 20% on 200,000 Equity Shares of Rs.100 each to be paid;
(b) Rs.250,000 be added to the Reserve Fund; and (c) Rs.20,000 be paid to the
employees as bonus.
Required: Make journal entries to give the effect to the above resolution and show
the Profit and Loss Appropriation Account of the company. Ignore income tax. (20)
Q. 2 Naveed Ltd. Three machines on 1 st January, 2012, that has fair value of Rs. 10,000
each, from Izhar Ltd. for six years. Interest rate implicit in the lease is 10%. Useful
life of equipment is 5 years. Annual rentals are payable at the beginning of each
year. The lessee depreciates the asset using the straight-line method.
(20)
Required:
i. Compute the annual rentals payable.
ii.Prepare amortization schedule.
iii. Prepare the journal entries for the first two years in the books of lessee.

Q. 3 Write the detailed note on the followings:

a.
Amalgamation
b.
Liquidation

(20)

Q. 4 Define the Share Capital. What do you understand by issuance of shares at par, at a
premium and at a discount? Illustrate your answer with suitable example.
(20)
Q. 5 The following data is available from the financial statements of ACBM
Corporation for the period ended on December 31st 2013:
Equity Share Capital
Profit & Loss A/c
Sundry Creditors
Provision for Taxation
Total Assets

Rs. 11,00,000
200,000
240,000
180,000
30,00,000

Capital Reserve
6% Debentures
Bills Payable
Outstanding Creditors
Sales

Rs. 500,000
500,000
120,000
160,000
50,00,000

Required: You are required to compute to following Ratios of ACBM Corporation:

(20)
i. Debt-Equity Ratio
ii.Proprietary Ratio
iii. Current Ratio
iv. Return on Investment
v. Assets Turnover Ratio
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