COMSATS University Islamabad: Accounting I

COMSATS University Islamabad
Department of Management Sciences

Terminal Examination – Fall 2022
Accounting I
Program: BBA-2(A&B) Total Marks: 50

Date: January 27, 2023 (Friday) Time Allowed: 3 Hour
Time: 0900-1200 hours Name of Instructor: Dr. Aamer Waheed
Instructions for attempting paper:

1. Carrying of Digital Diaries and Mobile Phones are not allowed.
2. Sharing of Calculator is forbidden. Please do not mark/write anything on question paper.
Question No. 01 (10 Marks)
The Asif Electronics sells electronic equipment. Younas Fans recently introduced the 440-Bracket
Fan. During the current year, the Asif Electronics purchased nine of these fans at the following
dates and acquisition costs:
Date Units Purchased Unit Cost Total Cost

October 01 2 Rs. 3,000 Rs. 6,000
November 17 3 3,200 9,600
December 01 4 3,250 13,000
Available for sale during the year 9 28,600
On November 21, The Asif Electronics sold four of these Fans to the PakTurk School. The other
five remained in inventory on December 31.
Required:
Assume that The Asif Electronics uses a perpetual inventory system. Compute (1) the cost of goods
sold relation to the sale of Fans to the PakTurk School and (2) the ending inventory of these fans
on December 31, using each of the following flow assumption.
1. Average cost
2. First In First Out (FIFO)
3. Last In First Out (LIFO)
Hadi forwarding agency purchased office furniture for Rs.50,000. The useful life of furniture is
eight years. The double-declining balance method is used for depreciation and estimated salvage
value of furniture is Rs. 6,000.
Required:
a) Prepare depreciation table for furniture
b) Prepare adjusting entries as appeared in the book of Hadi forwarding agency at the end of
each year.
c) Prepare journal entry if furniture is sold at Rs. 5,000 after completing the useful life.
Page 1 of 3
Based on the following trial balance, prepare Adjusting Entries, Adjusted Trial Balance, Closing
Entries, Income Statement, Owners Equity Statement and Balance Sheet for Asim Cargo
Company for the month of September 2017. The company closes its accounts by the end of each
month.
Asim Cargo Company

Trial Balance
September 30, 2017
Account Title Debit (Rs) Credit (Rs)

Cash -------------------------------------------------- 73,050
Account Receivable ------------------------------ 2,000
Office supplies ------------------------------------- 8,700
Unexpired insurance ----------------------------- 4,000
Prepaid Rent --------------------------------------- 16,000
Equipment ------------------------------------------ 270,000
Accumulated Depreciation – Equipment --- 70,000
Building --------------------------------------------- 150,000
Accumulated Depreciation – Building ------ 97,000
Asim, capital --------------------------------------- 315,000
Asim, withdrawals ------------------------------- 6,900
Accounts payable --------------------------------- 16,800
Unearned service revenue ---------------------- 8,000
Service revenue ------------------------------------ 29,250
Salary Expense ------------------------------------ 1,100
Advertising expense ----------------------------- 1,400
Utilities expense ----------------------------------- 2,900
Total ------------------------------------------------- Rs. 536,050 Rs. 536,050
Adjustments
a) Office supplies balance on September 30, 2017, amount to Rs.4,600.

b) Depreciation on equipment for the month of September is pending. The company uses
Straight Line method for depreciation. The residual value of equipment is estimated to
Rs. 30,000 with useful life of 4 years.
c) Utilities bills received but not paid is Rs. 2,100.
d) Six Month rent amounting Rs. 24,000 was paid to landlord on 01 July 2017 and no
adjustment were made for current period.
e) Depreciation on building for the month of September is pending. The company uses
straight line method for depreciation. The residual value of building is estimated to Rs.
30,000 with useful life of 4 years.
f) Salaries owed to employees on September 30, 2017, amount to Rs.2,300.
g) Insurance Policy was purchased on 01 January 2017 for one year by paying Rs. 12,000 and
no adjustment were made for the month.
h) Unearned service revenue on September 30, 2017, amounts to Rs.6,800.
i) Interest on Account Payable is outstanding Rs. 500.
Page 2 of 3
Connect Inc. is a large-scale trading firm registered with SECP and it closes the accounts quarterly.
Connect Inc. had Rs.40 million idle cash. In the first two quarters of financial year 2017, the
company’s Treasury Manager entered into the following transactions:
16 January 2017 Purchased 200,000 shares of OGDCL for Rs.63.23 per share
01 February 2017 Sold 50,000 shares of OGDCL for Rs.65.5 per share.
15 February 2017 OGDCL, declared dividend of Rs.1.5 per share.
01 March 2017 Sold 5,000 share of OGDCL for Rs.62.5 per share.
The price per share of OGDCL stock stood at Rs.67 on 30 March 2017.
18 April 2017 Sold 15,000 share of OGDCL for Rs. 63 per share.
07 May 2017 Sold 30,000 shares of ODGCL for Rs. 67
Required:
Journalize the above transactions and work out the value at which the investments should appear
on the balance sheet of the company as of 30 June 2017. Also work out the effect on income
statement for the quarters.
Rafay Traders is a wholesaler and maintains allowance for bad debts @ 2% of credit sales. The
allowance for uncollectible accounts has a credit balance of Rs. 8,000. Record entries for the
following transactions for Rafay Traders.
a) Sold merchandise on account to Moiz Company, Rs. 3,800.
b) Sold merchandise on account to Asadullah Company, Rs. 2,500.
c) Write off both the Moiz Company and the Asadullah Company accounts as they went
bankrupt.
d) Asadullah Company unexpectedly paid off its account in full.
The following information is available for Arham Corporation regarding its March 31, 2005:
1. Balance per bank statement is Rs. 113,650.
2. Balance per books is Rs. 117,575.
3. Checks #7841 and #7878 for Rs. 32,000 and Rs. 10,600, respectively, were not among the
paid checks returned with the statement.
4. A deposit of Rs. 56,685 did not appear on the bank statement.
5. There was an EFT (electronic fund transfer) of Rs. 8,200 by a customer appeared on the
bank statement.
6. A bank credit memo indicated a collection of dividends from PTCL of Rs. 2,000 on March
20.
7. The bank statement indicated service charges of Rs. 40.
Required:
a) Prepare necessary journal entries required to update the accounting record of Arham
Corporation.
b) Prepare revised cash book (Bank A/C ledger) & prepare bank reconciliation statement in
report form.
Page 3 of 3

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COMSATS University Islamabad

Department of Management Sciences

Program: BBA-2(A&B) Total Marks: 50

Instructions for attempting paper:

Question No. 01 (10 Marks)

Date Units Purchased Unit Cost Total Cost

Question No. 02 (10 Marks)

Asim Cargo Company

Account Title Debit (Rs) Credit (Rs)

a) Office supplies balance on September 30, 2017, amount to Rs.4,600.

Question No. 05 (05 Marks)

Question No. 06 (05 Marks)

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