CPA
Foundation Leval
Financial Accounting May 2016
Suggested
solutions
Revision Kit
➧ | Financial Accounting -September-2015-Pilot-Paper |
➧ | Financial Accounting -November-2015-Past-Paper |
➧ | Financial Accounting -May-2016-Past-paper |
➧ | Financial Accounting-November-2016-Past-Paper |
➧ | Financial Accounting-November-2017-Past-paper |
➧ | Financial Accounting-May-2017-Past-paper |
➧ | Financial Accounting-November-2018-Past-paper |
➧ | Financial Accounting-May-2018-Past-paper |
➧ | Financial Accounting-May-2019-Past-paper |
➧ | Financial Accounting-November-2019-Past-paper |
➧ | Financial Accounting-November-2020-Past-paper |
➧ | Financial Accounting-December-2021-Past-paper |
➧ | Financial Accounting-May-2021-Past-paper |
➧ | Financial Accounting-August-2021-Past-paper |
➧ | Financial Accounting-April-2022-Past-paper |
QUESTION 1a
Bidii Ltd Manufacturing account for the year ended 31 March 2016 |
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Raw materials consumed
Opening of raw materials Add: purchases of raw materials Add: carriage on raw materials Less: closing stock on raw materials Direct material cost Direct labour: Factory wages(333,000-143,000) Direct expenses-royalties Prime cost Add: factory overheads Lighting expenses (70% x 72,000) Rent (70% x 120,000) Insurance expenses (70%x 132,000) Depreciation of production machinery 10%×600,000 General factory expenses Factory power Indirect labour Add: Opening work in progress Less: Closing work in progress Total cost of production |
Sh 000
46,000 400,000 39,400 (60,000) 425,400 |
Sh 000
425,400 190,000 37,000 652,400 50,400 84,000 92,400 60,000 66,000 118,000 143,000 1,266,200 33,000 (25,000) 1,274,200 |
Bidii Ltd income statement for the year ended 31 March 2016 |
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Sales Less: Cost of sales Opening finished goods Add: Total cost of produce Less: Closing finished goods Gross profit 2 / 5 × 2,400,000 Less expenses Lighting expenses 30% × 7,200 = Rent (30% × 120,000) Insurance expenses (30% x 132,000) Depreciation of office equipment 10%(100,000) Sales agent salaries 80,000 - (35,000 x 2) / 7 Carriage outwards Administrative salaries Commission to sales agents General administrative expenses Bank charges Discount allowed Net profit Less: Transfer to general reserve Less: Ordinary dividend (441,000 x 0.8) / 10 Retained profit for the year Add: Retained profit Balance b/d Retained profit Balance c/d |
667,000 1,274,200 (501,200) 21,600 36,000 39,600 10,000 70,000 124,000 270,000 19,000 144,000 9,600 28,000 |
2,400,000
(1,440,000) 960,000 (771,800) 188,200 (100,000) (35,280) 52,920 140,000 192,920 |
QUESTION 1b
Bidii Ltd Statement of financial position as at 31st March 2016 |
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Assets Non-current assets Production machinery Office equipment Current assets Inventory - Raw materials work in progresme Finished goods Trade receivables Cash in hand Prepaid sales agent salaries Total assets Equity and liabilities Capital and reserves Ordinary share capital; Retained profits General reserves Current liabilities Trade payables Bank overdraft Final ordinary dividend Total equity and liabilities |
Sh 000
(390,000 - 60,000) (100,000 - 10,000) 60,000 25,000 501,200 (35000 x 2) / 7 (429,200 + 100,000) |
Sh 000 330,000 90,000 586,200 691,000 15,000 10,000 1,722,200 441,000 192,920 529,200 497,000 26,800 35,280 1,722,200 |
QUESTION 2a
Partner Current account | |||||
Drawings Drawings in goods Balance c/d |
Maria Sh 000 2,800.0 150.0 5,401.5 8,351.5 |
Bakari
Sh 000 2,000.0 590.0 1,861.0 4,451.0 |
Balance b/d Interest on capital Salaries to partners Shares of profit |
Maria Sh 000 3,000.0 600.0 1,000.0 3,751.5 8,351.5 |
Bakari
Sh 000 1,000.0 250.0 700.0 2,501.0 4,451.0 |
Maria and Bakari
Income statement for the year ended 30 April 2016 |
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Sales Less: Cost of sales Opening inventory Add: purchases Add: carriage inwards Less: drawings in goods(150 + 590) Less: closing inventory Gross profit Less: Expenses Depreciation Buildings 2.5% x 8,500 Furniture 10%(3,200 - 750) Salaries and wages(2,400 + 200) Electricity (500 + 90) Allowance for doubtful debts (200 - 0) Insurance (300 - 40) Renovation of buildings Rent and rates Repairs and maintenance General expenses Office expenses Bad debts write off profit for the year Less: interest on capital M → 5% x 12,000 B → 5% x 5,000 Less: Salaries to partners M → B → Profits to be shared Share of profit M → 3 / 5 × 6,252.5 B → 2 / 5 × 6,252.5 |
Sh 000
19,000 62,140 960 (740) (15,600) 212.5 245 2,600 590 200 260 1,500 400 1,320 4,700 600 270 600 250 1,000 700 3,751.5 2,501 |
Sh 000
87,460 (65,760) 21,700 (12,897.5) 8,802.5 (850) (1,700) 6,252.5 (6,252.5) 0 |
QUESTION 2(b)
Maria and Bakari Statement of financial position as at 30/4/2016 |
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Non-current assets Buildings Furniture Current assets Inventory Account receivables Cash balance Prepaid insurance Total Assets Capital and liabilities Capital A/c Current A/c Current liabilities Account payable Bank overdraft Accrued salaries and wages Electricity |
Sh 000
(8,500 - 212.5) (3,200 - (750 + 245) (5,660 - 200) M → 12,000 B → 5,000 M → 5401.5 B → 1,861 |
Sh 000
8,287.5 2,205 15,600 5,460 230 40 31,822.5 17,000 7,262.5 6,200 1,070 200 90 31,822.5 |
QUESTION 3(a)
Statement of affairs as at 1 April 2015 | |
Assets Furniture and fittings Motor vehicles Freehold land Equipment Inventory Trade receivables Prepaid rates Bank balances Less: liabilities 15% bank loan 6,000 Trade payables 1,350 Accrued power 150 Capital |
Sh 000
1,200 3,000 2,400 6,000 1,800 2,700 90 810 18,000 (7,500) 10,500 |
Bank Account | |||
Balance b/d Receivables |
Sh000 810 178,500 179,310 |
Purchase of equipment Payment to suppliers Interest on loan Salaries Rates, Insurance and power Loan repayment Drawings Balance c/d |
Sh000
300 126,000 450 18,105 11,640 3,000 12,000 7,815 179,310 |
Receivables a/c | |||
Balance b/d Sales |
2,700 180,000 182,700 |
Discount allowed
Bad debts Bank Balance c/d |
480 120 178,500 3,600 182,700 |
Payables a/c | |||
Discount received
Sales Balance c/d |
450
126,000 1,500 127,950 |
Balance b/d Bad debts |
1,350
126,600 127,950 |
Samson Kimwatu Income statement for the year ended 31 March 2016 |
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Sales Less: Cost of sales Opening inventory Add: purchases Less: closing inventory Gross profit (3 / 10 x 180,000) Add: Other incomes Discount received Less: Expenses Discount allowed Bad debts Salaries Rates, Insurance and powers (11,640 + 90 - 120 + 240 - 150) Interest on loan (15% x 6,000 × 6 / 12) + (15% × 3,000 × 6 / 12) Depreciation Equipment (2,400 + 300 - 1,920) Motor vehicle (3,000 - 2,250) Furniture & settings (1,200 - 960) Profit for the year |
Sh 000
1,800 126,600 (2,400) 480 120 18,105 11,700 675 780 750 240 |
Sh 000 180,000 (126,000) 54,000 450 54,450 (32,850) 21,600 |
QUESTION 3(b)
Samson Kimwatu Statement of financial position as at 31 March 2016 |
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Assets Non-current Assets Free hold land Furniture and fittings Motor vehicle Equipment Current Assets Inventory Trade receivables Bank balance Prepaid rates Total Assets Equity and liabilities Capital Revaluation reserve Add: Net profit Less Drawings Non-current liabilities 15% Bank loan Current liabilities Trade payables Accrued power Accrued loan interest Total Equity and liabilities |
10,500 2,000 21,600 (12,000) |
Sh 000
8,000 960 2,250 1,920 2,400 3,600 7,815 120 27,065 22,100 3,000 1,500 240 225 27,065 |
QUESTION 4(a)
QUESTION 4(b)
QUESTION 5(a)
The primary goal of the IPSASB is to develop and issue high-quality international public sector accounting standards, improving consistency, comparability, and transparency.
IPSASB strives to meet the information needs of diverse users, including policymakers, legislators, citizens, and other stakeholders, providing relevant and reliable information.
IPSASB aims to enhance accountability and transparency by establishing standards that require comprehensive and clear financial reporting, providing a true and fair view.
Recognizing the dynamic nature of the public sector, IPSASB aims to adapt its standards to reflect changes in practices and the evolving nature of government operations.
IPSASB aims to facilitate global comparisons of financial information, promoting consistency and convergence to enable users to assess entities across jurisdictions.
IPSASB emphasizes the importance of accountability for stewardship of public resources, providing a framework for reporting on resource acquisition, use, and management.
IPSASB contributes to the promotion of good governance by providing a basis for transparent and accountable financial reporting, supporting effective decision-making.
IPSASB operates in the public interest, aiming to protect the interests of citizens and stakeholders by ensuring reliable financial information.
IPSASB supports the development of accounting and financial management capabilities in the public sector, providing guidance and resources for implementation.
IPSASB's work contributes to global financial stability by promoting sound financial management practices, building confidence among investors, creditors, and stakeholders.
QUESTION 5(b)
QUESTION 5(c)
QUESTION 5(d)
Compensating errors are errors that occur in different accounts but offset each other, so the trial balance still balances. For example, an overstatement of revenue in one account might be compensated by an equal overstatement of an expense in another account.
If a transaction is completely omitted from the accounting records, it will not impact the trial balance since no entries have been made for that particular transaction. However, it will result in misstated financial statements.
These are errors where entries are made, but they are incorrect. If the errors are offsetting (i.e., a debit error in one account is offset by a credit error in another), the trial balance may still balance.
Errors of principle involve using an incorrect accounting principle. For example, recording a capital expenditure as a revenue expenditure or vice versa. While this may not immediately affect the trial balance, it leads to inaccuracies in the financial statements.
If a transaction is correctly recorded in the journal but posted to the wrong account, it may not affect the trial balance if the debits and credits still match within the incorrect accounts.
Sometimes, entries may be mistakenly reversed (debit entry recorded as credit, and vice versa). If this happens in different accounts and the amounts are equal, the trial balance may still be in balance.
➦ | Economics-September-2015-Pilot-Paper |
➦ | Economics-November-2015-Past-Paper |
➦ | Economics-May-2016-Past-paper |
➦ | Economics-November-2016-Past-Paper |
➦ | Economics-November-2017-Past-paper |
➦ | Economics-May-2017-Past-paper |
➦ | Economics-November-2018-Past-paper |
➦ | Economics-May-2018-Past-paper |
➦ | Economics-May-2019-Past-paper |
➦ | Economics-November-2019-Past-paper |
➦ | Economics-November-2020-Past-paper |
➦ | Economics-December-2021-Past-paper |
➦ | Economics-April-2021-Past-paper |
➦ | Economics-August-2021-Past-paper |
➧ | Introduction to Law and Governance-September-2015-Pilot-Paper |
➧ | Introduction to Law and Governance-November-2015-Past-Paper |
➧ | Introduction to Law and Governance-May-2016-Past-paper |
➧ | Introduction to Law and Governance-November-2016-Past-Paper |
➧ | Introduction to Law and Governance-May-2017-Past-paper |
➧ | Introduction to Law and Governance-November-2017-Past-Paper |
➧ | Introduction to Law and Governance-November-2018-Past-paper |
➧ | Introduction to Law and Governance-May-2018-Past-paper |
➧ | Introduction to Law and Governance-May-2019-Past-paper |
➧ | Introduction to Law and Governance-November-2019-Past-paper |
➧ | Introduction to Law and Governance-November-2020-Past-paper |
➧ | Introduction to Law and Governance-December-2021-Past-paper |
➧ | Introduction to Law and Governance-April-2021-Past-paper |
➧ | Introduction to Law and Governance-August-2021-Past-paper |
➧ | Quantitative Analysis -September-2015-Pilot-Paper |
➧ | Quantitative Analysis-November-2015-Past-Paper |
➧ | Quantitative Analysis-May-2016-Past-paper |
➧ | Quantitative Analysis-November-2016-Past-Paper |
➧ | Quantitative Analysis-December-2017-Past-paper |
➧ | Quantitative Analysis-May-2017-Past-paper |
➧ | Quantitative Analysis-November-2018-Past-paper |
➧ | Quantitative Analysis-May-2018-Past-paper |
➧ | Quantitative Analysis-May-2019-Past-paper |
➧ | Quantitative Analysis-November-2019-Past-paper |
➧ | Quantitative Analysis-November-2020-Past-paper |
➧ | Quantitative Analysis-December-2021-Past-paper |
➧ | Quantitative Analysis-April-2021-Past-paper |
➧ | Quantitative Analysis-August-2021-Past-paper |
CPA past papers with answers