Daffodil International University

Department of Computer Science and Engineering

Faculty of Science & Information Technology
Final Examination, Fall 2020 @ DIU Blended Learning Center
Course Code: ACT 211, Course Title: Financial and Managerial Accounting
Level: 2 Term: 1 Section: MC 01,02,03
Instructor: SK Modality: Open Book Exam
rd
Date: Thursday 23 December, 2020 Time: 09:00 am -01:00pm
Four hours (4:00) to support online open/case study based assessment
Marks:40

Directions:
• Students need to go through the CASE STUDY shown in this exam paper.
• Analyze and answer specific section based on your own thinking and work.
• Do not share as this will be treated as plagiarism by Blended Learning Center.
Answer all the Questions

Question-1 [3]
Why do accrual-basis financial statements provide more useful information than cash-basis
statements? Explain.
Question -2 [3]
Think about a situation where you are a potential investor and you want to invest in a
pharmaceutical Industry . If you want to decide which company is financially more strong in
that case the company should follow which rules of GAAP so that they can easily compare
and take the right decision of Investment? Explain.

Question -3 [3]
“Depreciation is a valuation process that results in the reporting of the fair value of the asset.”
Do you agree? Explain.

Question -4 [3]
Teer company which makes ata ,moida and suji . For making this product they used various
raw materials which the company purchase from various suppliers. If Teer company didn’t pay
the amount at the committed time period to the supplier then against which the supplier should
sue. Following which rules of GAAP they should do this? Explain.
Question-5

(a) Prepare closing entries 4

(b) Prepare a post-closing trial balance 3
Question-6

Required:
Prepare Classified Balance Sheet 6

7. Aramit co distributes suitcases to retail stores and extend credit terms of 1/10, n/30 to all
of its customers. At the end of July, Aramit’s inventory consisted of 50 suitcases purchased at
Tk. 30 cash. During the month of July the following transactions occurred
July 1. Sold 40 suitcases on account Satchel World for Tk.50 each
12. Received payment in full from Satchel World
18. Purchased 60 suitcases on account for Tk.1700 from Kingman
Manufacturer, FOB shipping point, terms 2/10, n/30. The
Appropriate party also made cash payment of Tk. 100 for freight
On this date
20. Received Tk. 300 credit for 10 suitcases returned to Kingman manufacturers
22. Sold 45 suitcases on account to Fly-By-Night for Tk. 50 each
30. Paid Kingman manufacturer in full
31. Granted Fly-By-Night 150 credit for 3 suitcases returned costing Tk. 90
Requirement (8)
Prepare Journal entries in Perpetual Method
8. J.B. opened for business on March 1, 2008 as a consulting Firm. Its trial balance before
adjustment on October 31, 2008 is as follows:

Astromech Consulting
Trial Balance
31-October -08

Number Particulars Debit Credit

101 Cash 6,500.00

102 Account Receivable 4,000.00

103 Prepaid Insurance 3,600.00

104 Supplies 1,500.00

105 Account Payable 3,500.00

106 Office Furniture 12,000.00

107 Unearned Service revenue 3,000.00
108 J.B. Capital 19,100.00
109 Service Revenue 6,000.00

110 Salary Expense 3,000.00

111 Rent Expense 1,000.00

Total 31,600.00 31,600.00

Other data:
1. Tk. 600 of supplies has been used.
2. Mortgage interest rate is 15% per year (The mortgage was taken out on June1 and the amount of
Mortgage payable was 100000 Tk).
 3. The insurance policy is for three years(dated August 1)
4. Tk. 1,500 of the balance in the unearned service revenue account remains unearned
at the end of the month.
5. Salaries Expense is 500 per month.
6. Furniture has 4 years life with salvage value 2000 and per year amount of depreciation is
2500.
7. Dividend revenue earned and not yet received Tk 5000.
Instructions:
1.Journalize the adjusting entries on October31, 2008. (7)