Accounting and Control July 2013 Past Examination Question Paper – KNEC
This Past Paper examination was examined by the Kenya National Examination Council (KNEC) and it applies to the following Certificate courses
-
Diploma in Personnel Management
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Name:__________________________________ – Index No:_______________
2808/301
Candidate’s Signature:
ACCOUNTING AND CONTROL
July 2013
Date:______________
Time: 3 hours
THE KENYA NATIONAL EXAMINATIONS COUNCIL
DIPLOMA IN PERSONNEL MANAGEMENT
ACCOUNTING AND CONTROL
3 hours
INSTRUCTIONS TO CANDIDATES
Write your name and index number in the spaces provided above.
Sign and write the date of the examination in the spaces provided above.
This paper consists of SEVEN questions.
Answer any FIVE questions in the spaces provided in this paper.
Show all your workings.
All questions carry equal marks.
Candidates should answer the questions in English.
For Examiner’s Use Only
|
This paper consists of 30 printed pages.
Candidates should check the question paper to ascertain that all the
pages are printed as indicated and that no questions are missing.
© 2013 The Kenya National Examinations Council.
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- investment centre;
- profit centre;
- revenue centre;
- cost centre.
(b) Dania Traders has not been keeping proper books of account. The following information relates to the year ended 31 December 2012.
| Ksh | ||
| Receipts: | ||
| Cash sales | 680,000 | |
| Trade debtors | 30,000 | |
| Payments: | ||
| Cash purchases | 420,000 | |
| Trade creditors | 22,000 | |
| Equipment | 30,000 | |
| General expenses | 57,000 | |
| Additional information: | ||
| Balances as at 31 December | 2011 | 2012 |
| Ksh | Ksh | |
| Inventory | 24,000 | 36,000 |
| Motor vehicles | 460,000 | 440,000 |
| Equipment | 140,000 | 160,000 |
| Accounts payable | 11,000 | 5,000 |
| Accounts receivable | 6,500 | 4,200 |
2. (a) The following are the financial statements of Votex Limited for the year ended 31
|
Statement of financial position
as at 31 December 2012
| Ksh | Ksh | Ksh | |
| Non current assets | 16,600,000 | ||
| Less: ‘Accumulated depreciation | _136Q,QQQ | 14,640,000 | |
| Current assets: | – | ||
| Inventory | 800,000 | ||
| Trade receivables | 4330,000 | ||
| Cash at bank | 4,870,000 | ||
| Cash in hand | 280.000 | ||
| 10,480,000 | |||
| Current liabilities: | |||
| Trade payables | 100,000 | ||
| Provision for corporation tax | 3,180,000 | ||
| Proposed dividends | 1300,000 | ||
| 4,780,000 | 5.700.000 | ||
| 20340.000 | |||
| Equity: | |||
| Ordinary share capital (Ksh 5 each) | 10,000,000 | ||
| 20% preference share capital (Ksh 2.50 each) | 2300,000 | ||
| Retained earnings: | 7.840.000 |
| 20 340,000 |
Additional information:
The market price of each ordinary share was ksh 10.
Calculate each of the following ratios:
- current ratio;
- net profit margin;
- dividend yield;
- return on capital employed.
(9 marks)
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(b) Pong Enterprises remunerates its employees on time rate basis. Employees are paid a
bonus of 75% on time saved. The following information relates to three employees Kadenge, Grace and Ali for the month of June 2012.
| Kadenge | Grace | Ali | |
| Rate per hour (Ksh) | 80 | 100 | 75 |
| Units produced | 6,000 | 8,000 | 7,500 |
| Hours allowed per 1000 units | 6 | 4t | 8 |
| Time taken (Hours) | 32 | 36 | 65 |
For each employee, calculate:
- Basic pay;
- Bonus pay;
- Gross earnings.
(11 marks)
- error of omission;
- error of commission;
- error of principle;
- error of original entry.
(8 marks)
(b) The following information relates to the production department of Jogoo Manufacturers for the month of May 2012.
| Ksh | |
| Direct materials | 1,600,000 |
| Direct labour | 800,000 |
| Indirect labour | 750,000 |
| Depreciation | 900,000 |
| Repairs and maintenance | 800,000 |
Additional information:
- 1,000 units were produced during the month.
- Repairs and maintenance has a fixed cost of Ksh 200,000.
- 90% of indirect labour is variable.
Using the inspection of accounts method, determine the:
- variable cost per unit;
- fixed costs for the month;
- estimated total cost of producing 1,200 units.
(12 marks)
(a) Nasaka Limited manufactures three products F, G and H. The following are the estimates for each product for the coming year.
Selling price per unit
Raw material (1 kg @ Ksh 10)
Labour
Variable overheads Demand per annum (units)
Additional information:
| F | G | H |
| – Ksh | Ksh | Ksh |
| ‘1,800 | 1,400 | 1,650 |
| 160 | 200 | 125 |
| 300 | 200 | 500 |
| 540 | 400 | 470 |
| 4,000 | 5,000 | 3,000 |
Due to drought forecasted by the meteorological department, raw materials will be limited to 200,000 kgs only.
- Calculate:
- contribution for each product;
- contribution per kg of raw material for each product.
Advise the management on the appropriate product mix in order to maximize profit.
(12 marks)
(b) Mali Wholesalers had the following transactions during the month of May 2012.
Bought goods for Ksh 280,000 on credit from Sivlim Enterprises Sold goods on credit to:
Batik Traders Ksh 78,500 Zoro Limited Ksh 110,200.
Bought goods on credit from Timex Manufacturers Ksh 320,000 and received a trade discount of 10%
Zoro Limited returned goods worth Ksh 6,400 Returned goods to Silim Enterprises worth Ksh 13,000 Sold goods on credit to Peter Traders of Ksh 189,000 Batik Traders returned goods worth Ksh 14,500
Prepare each of the following books:
- purchases journal;
- sales journal;
- returns inwards journal;
- returns outwards journal.
(8 marks)
(a) The following information was obtained from the financial records of Karam Enterprises for the month of June 2012.
| Cash at hand | – | 60,000 |
| Cash in bank | – | 430,000 |
| Debtor’s accounts: | ||
| G.Polot | 8,000 | |
| B. Abdi | 45,000 | |
| Creditor’s accounts: | ||
| H. Tindo | 12,000 | |
| A. Muta | 25,000 |
| Ksh |
Transactions during the month:
June 4 B. Abdi settled his account by cheque deducting a discount of 5%
June 12 Withdrew Ksh 32,000 from the bank for business use
June 17 Paid H. Tindo the amount due to her by cheque after deducting a discount of Ksh 500
June 20 Bought stationery worth Ksh 2,000 by cash
June 24 Settled A. Muta’s account after deducting a discount of 2t%
June 26 Paid rent Ksh 16,000 by cheque June 30 Paid salaries Ksh 80,000 by cheque
Prepare a three column cash book for the month of June 2012. (8 marks)
(b) The following estimates have been made by Silver Enterprises for the last four months of the year 2013.
Month
September
October
November
December
Additional information:
- All sales are made on credit. 80% of the sales is received during the month of sale and the balance in the following month.
- Purchases are settled in the following month.
- Salaries are paid monthly.
- Rent is payable quarterly in advance.
- Furniture worth Ksh 200,000 will be purchased in October and payment made in December.
- The cash balance on 1 October 2013 is expected to be Ksh 750,000.
Prepare a cash budget for the months of October, November and December 2013. (12 marks)
Tagax Limited has three production departments Pr P2 and P3 and two service departments Sf and S2. The following are the forecasted overheads for the year ending 31 December 2013.
| Departments | Overheads |
| Ksh | |
| P, | 2,400,000 |
| P2 | 5,000,000 |
| P3 | 8,000,000 |
| S, | 3,000,000 |
| s2 | 4,000,000 |
Service departments provide services to other departments as per the following percentages:
| p, | p2 | P3 | s, | s2 |
| 40% | 32% | 20% | 8% | |
| 35% | 30% | 25% | 10% | – |
- Reapportion the service department overheads to production departments.
- Determine the total overheads in each production department.
(9 marks)
(b) The following information relates to Tajiri Social club.
Income and Expenditure Account
for the year ended 31 December 2012
| Ksh | Ksh | ||
| Rates and rent | 65,000 | Subscriptions | 145,000 |
| Depreciation on equipment | 11,000 | Donations | 120,000 |
| Maintenance expenses | 12,500 | ||
| Depreciation on furniture | 3,500 | ||
| Loss on disposal of furniture | 4,000 | ||
| Surplus | 169.000 | ||
| 265.000 | 265.000 |
The furniture disposed had a net book value of ksh 12,000.
Prepare a receipts and payments account for the year ended 31 December 2012.
(11 marks)
- (a) Explain four advantages of cost accounting to the management.
The following trial balance was extracted from the records of Kalulu Traders as at 31 December 2012.
| – | Ksh | Ksh |
| Purchases | 750,000 | 453,000 |
| Capital | 800,000 | |
| Sales | ||
| Drawings | 80,000 | |
| Rent and rates | 145,000 | |
| Salaries and wages | 22,000 | |
| Accounts receivable | 40,000 | |
| Cash at bank | 112,000 | |
| Cash in hand | 8,000 | |
| Accounts payable | 56,000 | |
| Inventory (1 January 2012) | 40,000 | |
| Equipment at cost | 140.000 | 28.000 |
| Accumulated depreciation – Equipment | 1.337.000 | 1.337.000 |
Additional information:
- Inventory was valued at Ksh 36,000 as at 31 December 2012.
- On 31 December 2012, rates prepaid amounted to Ksh 10,000 while rent accrued was Ksh 5,000
- Depreciation on equipment is charged at 5% per annum on cost.
Prepare:
- An income statement for the year ended 31 December 2012.
- Statement of financial position as at 31 December 2012.
(12 marks)
