Co-operative Accounting November 2010 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 Co-operative Management
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THE KENYA NATIONAL EXAMINATIONS COUNCIL
DIPLOMA IN CO-OPERATIVE MANAGEMENT
(a) Explain five contents of the asset register of a co-operative society. (10 marks)
(b) The following balances were extracted from the books of Tamutamu Co-operative Society on 1 January 2010.
Cash at bank 410,000
Cash in hand 80,000
Transactions for the month of January 2008 were as follows:
f £ •
2 Sold milk for cash Ksh. 13,000.
- Deposited Ksh. 75,000 into the bank account.
- Bought fuel and oil for Ksh. 5,000 in cash.
10 40 members joined the society and paid cash Ksh. 4,000 as shares and Ksh. 800 as entrance fees.
- Received a cheque for Ksh. 150,000 from K.C.C. Ltd for milk delivered.
- Withdrew Ksh. 160,000 from bank for office use.
- Paid members Ksh. 70,000 cash for milk delivered.
- Paid wages Ksh. 24,000 in cash.
Prepare a Cash Journal with analysis columns for cash and bank. (10 marks)
- The following is the balance sheet of Jengo Co-operative Society as at 30 June 2010.
|Share capital||14,000,000||Land and buildings||2,500,000|
|Accrued general expenses||140,000||Stocks||260,000|
|Forecasts for the period from July to September 2010.
- Wages are paid on the last day of tlfe month.
- All sales and purchases are made on credit
- Sales for May were Ksh. 800,000. Purchases for April, May and June were Ksh. 190,000, Ksh. 280,000 and Ksh. 300,000 respectively.
On average, debtors pay after two months while creditors are paid after three months.
- General expenses are paid one month after they are incurred. General expenses for the month of June were Ksh. 140,000.
- Stocks on 30 September was J£sh. 300,000.
- Depreciation on motor vehicles and furniture is to be provided at 25% and 7% per annum respectively.
- cash budget for the months of July, August and September 2010.
- a budgeted trading profit and loss account for the quarter ended
30 September 2010. (20 marks)
- (a) Explain four powers that may be exercised by the Commissioner for
Co-operative Development during liquidation of a co-operative society. (8 marks)
(b) Mazao Co-operative Society Ltd has a tractor which is used to transport maize for members and non-members. The members are charged Ksh. 500 per kilometre while non-members are charged Ksh. 575 per kilometre. The estimated costs on the tractor are as follows:
Repair and maintenance Fuel and oil Depreciation Licence Tyres Insurance Driver’s salary Loader’s salary
The tractor can operate a maximum distance of 105,000 kilometers.
- Calculate the break-even point in kilometres for
- Advise the management on whether to serve members or non-members. (12 marks)
- Kiame Multipurpose Co-operative Society sells chicken feed. It has five employees whose monthly wages and salaries amount to Ksh. 16,400.
The society owns equipment bought two years ago at a price of Ksh. 193,000. The current book-value of the equipment is Ksh. 96,000. The society uses straight line method of depreciation.
All other operating expenses amount to Ksh. 4,800 per month.
During the month of November 2009, the society had the following transactions:
The society had an opening stock of 200 bags valued at Ksh. 28,000.
- The value of closing stock using First In First Out (FIFO) valuation method.
- Trading profit and loss account for the month ended 30 November 2009. (20 marks)
- Moto and Lola Co-operative Societies decided to amalgamate and form Motolola Co-operative Society Ltd on 1 January 2010.
|The balance sheets of Moto and Lola Co-operative societies at that date are given below:
Motolola Co-operative Society Limited is to acquire the assets including cash of both societies except Ksh 20,000 retained by the liquidator from each society.
- a provision for bad and doubtful debts at 2% is to be made on the closing debtors.
- goodwill to be taken over at balance sheet date for the purpose of purchase consideration but not to be shown in the books of Motolola society.
- Purchase consideration is to be discharged by issue of shares of Ksh 20 each.
- All other assets and liabilities are to be taken over at book values.
- Realization accounts of Moto and Lola Co-operative Societies.
- Purchase consideration.
(Hi) Shares to be taken up by Moto and Lola in Motolola Co-operative Society Ltd.
- (a) Explain five factors that may lead to the division of a registered co-operative
society. (10 marks)
(b) On 31 August 2010, the balance at the bank as shown by the Cash Journal of
Mau Co-operative Society Ltd. was Ksh. 6,200,000 while the bank statement showed a credit balance of Ksh. 6,350,000. A comparison of the cash journal and the bank statement showed the following differences:
- Cheques drawn and not yet presented for payment totalled Ksh. 2,030,000.
- Cheques paid into the banlcSn 31 August 2010 and not appearing in the • bank statement amounted Ksh. 1,901,050.
- Items shown in the bank statement but not entered in the cash journal included:
Bank charges 3,950
Dividends collected by the bank 48,000
Payment for insurance by standing order 32,000
- A cheque received for Ksh. 32,000 was entered as Ksh. 23,000 in the cash journal.
- updated cash journal.
- bank reconciliation statement as at 31 August 2008. (10 marks)
Plant to be taken over at Ksh 300,000 for Moto and Ksh 250,00 for Lola.