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    DBM 232-1

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    Newton otirn
    This document contains instructions and questions for an accounting exam on financial and cost accounting. It includes questions about reasons for partnership dissolution, calculating partner capital and current accounts based on profit sharing ratios and capital contributions, and explanations of cost classifications, labor cost variances, break-even analysis, and sales volume needed to achieve a profit target.

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    DBM 232-1

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    Newton otirn
    81 views2 pages
    This document contains instructions and questions for an accounting exam on financial and cost accounting. It includes questions about reasons for partnership dissolution, calculating partner capital and current accounts based on profit sharing ratios and capital contributions, and explanations of cost classifications, labor cost variances, break-even analysis, and sales volume needed to achieve a profit target.

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    Case study ya enterprise risk management at ABN AMRO

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    This document contains instructions and questions for an accounting exam on financial and cost accounting. It includes questions about reasons for partnership dissolution, calculating partner capital and current accounts based on profit sharing ratios and capital contributions, and explanations of cost classifications, labor cost variances, break-even analysis, and sales volume needed to achieve a profit target.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    81 views2 pages

    DBM 232-1

    Uploaded by

    Newton otirn
    This document contains instructions and questions for an accounting exam on financial and cost accounting. It includes questions about reasons for partnership dissolution, calculating partner capital and current accounts based on profit sharing ratios and capital contributions, and explanations of cost classifications, labor cost variances, break-even analysis, and sales volume needed to achieve a profit target.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    NAIROBI BRANCH

    JULY - DECEMBER 2019


    COURSE: KIM DCM III BM

    SESSION: Morning, Early Morning, Afternoon, and Saturday, Evening

    UNIT CODE: DBM 232: UNIT NAME: FINANCIAL AND COST ACCOUNTING II

    DAY & Date: WORK BASED Time:

    Instructions
    ANSWER ALL QUESTIONS

    1. Discus the reasons for dissolution of partnership.

    2. Kamau and Kimani are Partners sharing profits and losses in the ratio 3:2
    respectively. The partnership agreement provides for Kimani to receive a salary of
    Sh. 4,000,000 per annum, and interest on capitals for both partners at 5% per annum.
    The partnership Statement of Financial position as at 31 December 2017 was as
    follows.

    Sh.”000” Sh.”000”
    Capital accounts
    Kamau 16,000
    Kimani 10,000 26,000
    Current accounts
    Kamau 3,200
    Kimani (300) 2,900
    Accounts payable 3300
    32,200
    Premises 20,800
    Equipment at cost 8000
    Depreciation (4,800) 24,000
    Inventory 5,600
    Accounts Receivable 2,200
    Cash 400 8, 200
    32,200

    On 1 April 2017, Kimata was admitted to the partnership. He had been a salaried
    employee, earning Sh.8, 000 000 per annum. The terms of his admission to the
    partnership were as follows:
    i. Kimata should introduce Sh.12, 000,000 in cash as capital into the business.
    ii. Goodwill should be valued at 14,000,000 for the purpose of his admission.
    It was agreed that goodwill should not be included in the balance sheet of
    the new partnership.
    iii. Kimata should receive a salary as a partner of Sh. 6,000,000 per annum.
    Kimani’s salary should be raised to Sh. 6,000,000.
    iv. Interest on capital should be raised from 5% to 6% per annum and
    calculated on the capital accounts after the elimination of goodwill.
    v. The new profit sharing ratio for Kamau, Kimani and Kimata should be
    4:2:1 respectively

    In preparing the draft financial statement for the year ended 31st December 2017, the
    partnership accountant Otieno calculated that the partnership profit for the year was
    Sh.55, 155,000.

    Profit is assumed to accrue evenly during the year. Partner’s cash drawing for the year
    were Kamau sh. 23,705,000, Kimani sh. 19,525,000 and Kimata sh.8, 250, 000

    Required:
    a) The Profit and loss appropriation account for the year ended 31st December 2017.

    b) i) The Current accounts of the partners for the year ended 31st December 2017

    ii) The Capital accounts of the partners for the year ended 31st December 2017

    3. a) Explain the various classifications of costs


    b ) Explain four causes of labour cost variance

    c) A company has fixed costs of Shs. 5,800,000 and contribution Margin of 45%. The selling
    price per unit is sh. 100. Compute the break-even point in units and shillings.

    d) Suppose the company intend to make a profit of Shs. 6,000,000, how much should be sales in
    units and shillings.

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