SECOND SEMESTER EXAMINATIONS ARE HERE!!!!! Put in your best and God will do the rest Its normal to feel stress and be anxious as a student espeacially during exam season. Psalm 119:143 "as pressure and stress soe exantes bear down on me, | find joy in ALBU Exco’s your commands”. you are not alone just keep doing your best and commuting your works into God and you shall come out victorious psalm 16: 8 “| know the Lord is always with me. | will not be shaken, for he is right beside be. Declare this throughout your examinationSCHOOL OF MANA JETMENT OF ACCOUNT COND SEMESTER EXA! Total Marks; on A, TWO in Section B and ONE \ y question In See 1s on the answer Sheets/Booklets, Attempt the compu! in Section C de tats are not required to write their name JON A - COMPULSORY ques nds for 2 TION! td is a company that is engaged in petroleum operation with wving information was extracted from its rece ONA-ARA Oil L end of October accounting year, The 1 of 150,000 barrels per quarter, half ofthe yearly exported ene for the erude oil exported is N45. The posted price price for local erude oil is N4 and the The company exported crude 0 il was sold locally, the actual selling price for export sales is N30 with API gravity of 33% Posted ‘actual API gravity is 43°, The posted price ean be increased/decreased by N2 also derived income from Natur tor of 74°, Other costs incurred are as follows; ral Gas Sales to MFD Nig Ltd valuing $5,500,000 x Royalties 2,500,000 12,000,000 17,000,000 Intangible Drilling cost Transportation cost lowing additional information; You are given the fo Ltd bought a Motor vehicle (QC 1, On-Ara oil Building worth N2,000,000 in December 20X4 4 with 82,000,000 was -ar Plant and equipment importes ied to 810,000; Balancing Allowance of ) of NS,000,000 in July 20X5 and a Located on-shore. During the y 3, Capital allowance brought forward amount 90,000. 1contarks) SpCTION De ATTEMPT ANY TWO QUESTIONS QUESTION? rided 30 December 2 The company bas been operating bs ‘nremese operations in Canaca for the Yea" x 40,000,000 109,000 Tumover Other income 43,700,000 Less: Cast of sales 15,313,000 28,387,000 Less: Donation to clubs 750,000 Rent 1,763,000 Consultancy services 449,000 850,000 5 financial year 2.200,000 for bad debt 1,430,000 Allowance Enieriainment and traveling expenses 2,424,000 Property rates, tariff, duties 1,910,000 Foreign exehange loss provision 735,000 Sales commission 2,476,000 Repairs and maintenance 2,240,000 3,763,000 Miscellaneous expenses Net Profit Other Information: {The apil allowances forthe year 2s agreed with the Inland Reweave weres- Nigeriasnitiat een 520,000 Ant company hd paid to the C bad ii 0 the Cana The fhe total profi from C Sem gi Forel ‘exchange loss prov mounied to Wid000000 : : annie 6 W660 0 150000 4 tt on ince Doltar in bank in the Canada eault of fuetastion j ' tn in somvered cath balance oo ae rece tocompute the tax liabillty of | rrmning no aouble agreement, (15, ic ee profits for the ta YE Question MAYA transport Service L1s. if se airline business, the rragte Decernber 2021 a8 given lows he dota of ts wot activites forthe yearend wim, ncome from passengers into Nigeria sat feos passengers conor Niger soi Jacome from passenos into Canada oo ncome from eargors into Nigerit. a Frenne fom eanB0S OOF of Niger 300, 1,700 Less: Salaries 120 Rent 80 wisions for bed and doubsful debts 350 Depreciation 6 ‘Admin Expenses #0 Net Profit 1.000 sng additional information yas provided ‘The ‘i jn expenses is inclusive of 2,000,000 for the traveling expens® ‘of MD's friend igs, Jane) to Dubal for vacation and ful debts is related 10 specific bad and 2, Only 90% of the Provisions for bad doubtful debt- ‘The business al5° included 385,000,000 onated to a commmumity the rental expense scent envn Tames tgaae eae coeuae COPE?‘question + inet pe eevicabe Was The folowing ine pANLOLADI sat guly 31 Ju pal expenavce wa incu he flo Fst and MachinetY Scared Piast eichicl acquired 37102029 4 Land Aegttired 1172023 a Furniture and fit in 6 Te profit for 83,2025 was 140,000,000, BoE onan stein 4 fo and NS POD TePRY™ oo eejedcied before ariving. «tO (asMarls) red to commpate prot ad ta SECTION! ATTEMPT ONE QU ESTION 4-wnich amounted tO income amounted 10 ution and QUESTION S jo works in O' cosh ttl tee oO 202) So itn his foceign Dr. Akande wh CADI1,000 and the #6 pai 400,000, He also received wAD.000. He ws given a Motor Venice se i,090,000, His monthly pension con red 1,000 respectively. He alse Yereived rentah incoene of to be given to Dt ‘Compute the eredit ranted to 10,000 uble taxation sgreet and Dividend of N90, made from hat exchange rate is (000 during the yo#F Canada Assuming @ & NR0ICAD1.(10 Marks) premium. amor nt. between 450,000 (Net) Akande on his income Nigeria and Canada. Note qsuitant io ONA-ARA Nig Pic, The equipment locally fed you during & chat capital (Principals) for 3 will be QUESTION 6 You have just been ‘company is a newly ost to help reduce the spread ond e him in the office explaining t0 ¥ ishing the company. On€ ‘of which is to enjoy indvisory Co" employed as a THX! lished legal entity producing sophisticated medi {feet of COVID-19, The CFO hid just ‘the intention ofthe providers of with “Tax Holidays since the business [i stabilcompany is e9906™ ae ing for his revi: before the Board mect NIGERIAN TAX RATE 1, RATES OF PERSONAL ‘Consolidated relief allowance is com higher + 2026 of Gross Income. fier the Consolidated relief all income shall be taxed as specified in the tx Taxable Income First N300,000 Next N300,000 ‘Next 500,000 Next N500,000 ‘Next N1,600,000 Over 3,200,000 27 3. Capital allowance rate Plant and Machinery Motor Vehicle Furniture and fittings INCOME TAX <4 at 200,000 oF I pul itowance and tax exempt IA, 15% 50% 25% AA Nill 25% 20% table below: Rate of Tax (26) 7 n 15 19 21 24 16 of Gross Income jtems have been granted, TIARY EDUCATION TAX (2.5% of Assessable Profit) whichever 15 the balance ofOa lity i SCIENCES, T OF ACCOUNTING SECOND SEMESTER EXAMINATION COURSE Cope: ACCT 462 COURSE TITLE: FINANCIAL REE Examiner: Nwaobia, A. N. (PhD) PORTING & ETHICS OF ACCOUNTING INSTRUCTIONS L 2 hours, 15 mins. Hage Tien section A, two questions from section B and one section C. ‘OT required to Wet ames on the answer booklets. SECTION A Compulsory Q0 marks) Question One TERS 15 Revenwe from Contract with cus Standards (IAS 11 & IAS 18) relating to Required: Homers was issued in 2014 atid replaces the previous &. Identify the five steps which need to be followed when Tecognizing revenues from contracts ~ with a customer. (marks) b. Granges Ltd Granges Limited has as one of its ms hospital. In June would de: “Jor customers, the Fredric! 2015 a contract was k Medical Centre (FMC), a private under the terms of which Granges Limited sign a new radiotherapy . The machine is based on a new innovation, and is being developed for the specific wduitements of FMC. It was estimated that the design and Production of the machine would ttke 18 months with estimated installation in December 2016. Asat31 December 2015, Granges Limi reavily in the contract, and design costa ?sin, the draft statement of fe as work In PORE Tmas a current lability, 00s oe cher accounting totalling =N=3,500,000 have been recog financial pasition, Deferred income of #2) oft oreetatataveiene made by FMC to finarie® PA with EM! entries have been made in respect of the conte} . Ld received # not! ce of cancellation of the contract by ies that FMC losta significant amount ay forts completo AESly on the financial position of the ronal impacting Sgt -teonfirms that FMC contacted him abo oe esponsite for the FMCH Gifficuties in December 2015. of funding tow company. The man the company’s financial Over 83,200,000 "A . i 2. TERTIARY EDUCATION TAX (2.5% of Assessable Profit) 2Attempt Question One in Section A, Two (2) Questions in Section B and One (1) Question in Section C, Do not write your names on the answer sheet/booklet, Only student's matriculation number is required. Section A (Question One) The following information was extracted from WAZOBIA University on the 31" of December, 2020, 7000 50,000 120,000Go maresy ' 12/2019 es comprehensive income statement forthe year ended 3 (6 marks) 1 gpatement of nancial postion as at that date (@marks) a3 Bank account (3 marks) 4 Fund account (Fotal:20marks) | gucrion B-ATTEMPT [ANY TWO (2) QUESTIONS 1 THIS SECTION 301 Question Two i i i resration below relates the budget Oe Federal Ministry of Information of isha a No in Post. Current salary aD Level Increment 37000 000 Director 2 7 6,000 600 Deputy Director 3 16 4,800 360 Asst Director 4 15 4,600 300 Chief Information Officer 6 4 4,400 280 Principal Information Officer 10 13 4,000 240 Snr Information Officer 8 2 3,800 230 Information Officer I 9 10 3,600 220 Information Officer II 10 9 3,200 200 Snr Clerical Officer 12 6 2,500 180 Clerical Officer 10 5 2,000 150 3 1,500 20 Office Assistant Question Three " Blectricity Corporation of Adada State of Nigeria obtained a loan of N2000million from the Paris Club of of Creditors for the construction of its hy i lowing information was i yydro power station in Adada. The following i extracted from the Corporation's books of account for the year ended 31 December, 2014 which was its first year of operation. N’000Electricity bills collected Furiture and Fixtures Motor Vehicles 900,000 Office Equipment «. 1,800,000 Amount of loan repaid See Aaiminstrative and General Expenses eh Miscellaneous income reeived during the eae a Government gran 25,000,000 of stationeries ; 60,000 Loan to contrac staff working at the station 45,000,000 Tom repayment by the contract staff’ —— 4,000,000 Additional information, 1. Depreciation on straight-line basis is to be as follows. * Motor Vehicles 25%, * Office Equipment 20%, * Office Furniture and Fixtures 20%, ~ 2 Out of the N300million for administrative and general expenses, second year of operation (i.e. 2015). ~ 3. Outof the billion loan repayment to the Paris Club of Creditors during the year, ‘N24 billion N80million relates to the government to capitalize grant for the project. Required ae Comprehensive Income Statement for the year ended. (6 marks) 2. The Corporation Statement of Financial Position an 3. Bank Account and Notes to the accounts. ect Question Four Irepodun State is inhabited by 8,000,000 citizens. The State is expected to generate revenue from ‘i ae ‘The following details are provided for the 2015 fiscal year, a en ifiees yf taxable adults residing in the State is 3,500,000. The rate of tax Paya aie is - Ce ae 000 per taxable adult on average per annum and expected x Se See (anes 20,500 industries which 75% are expected to pay land use charges o K (ii) There are ey 2,300,000 residential buildings expected to pay land use charge of 4,500 per house per (iii) There are , ae anion Government will generate N12,000 per annum per st on ee nai a 3,000 modem stalls and Oe ani Se seve ioceing i ane Ga Samal Bees vd hawkers that are assumed t0 be operators of the markets ; 750.000 sellers ai} governments within the areas of location of the markets are entitled to 50% of revenue generated from the markets. : (v) There are 5,000 mass transit buses owned by the State Government, each of which generates $15,000 per business day. Assume 28 business days in a month and 12-months in a fiscal year. (vi) The State expects the following additional revenue in the year: Million Statutory allocation from the Federation Account 25,000 Miscellaneous Revenue 3,000 Required: Compute the revenue budget of Irepodun State Government for the fiscal year 2015, (Show your workings) - 10marks b, Budget in the public sector serves as a guide for proper planning and control but there are factors inhibiting its successful implementation. Explain any five (5) of these factors - —— Smarks (Total: 1Smarks) ¢ Question Five State of Affairs Ministry projected sales for tne third-quarter of 2021 is 180,000; N210,000; and 3N195,000 respectively. The ministry has the following policies: # Gross profit as 20% mark-up with Just-in-time purchase to enjoy 6% discount from suppliers © 80% of the sales are on credit, out of which 40% are to be realized in the month of sales and the balance in 30days * Monthly variable overheads of 20% of gross sales + Monthly fixed overhead of N25,000 (inclusive of N5,000 depreciation) The Ministry intends to acquire a machine of NS0,000 in August |» The ministry is expected Required: F a. Discuss the justifications for setting up these boards - 2mks b. Required number of officials and status to constitute these boards - 2mks oH The process of conducting their activities and presentation of their reports - 6mks (Total: 10marks) Question Seven ; , a. __ Discuss three legal framework for the National Debt Management in Nigeria (4%marks) __ Discuss three effects of foreign Public debt on the economy. ae! cas : , sefly examine the purposes for which unallocated stores are aca 4 Ma eet (Total: 10marks) A achancoen vray SCHOOL OF MANAGMENT ne DEVANEMENT OF ACCOUS INEW SEMESTEIC IN ANIWA Course THe: Public: te 0 i Section A, tWo in Section B fe names on the answer § A: Question One Hosaied! in Bayusns in fever Sa The company ablated 4 loan fon oF it hydro power sai fons books of account fora Me Of Nigeria is Of N2000milbion f it, The fol tas aid ner expN, NDOrillon Fthe Loran Cab Credo dying lance wus capital en ill crit stat Woon, N92 Wty SECTION 8 QUESTION rwo Marks) QUESTION THREE What is QUESTION FOUR . Dirsuss the reasons for five object Te Write short note on Recurrent and Capital expond r SECTION C J QUESTION Five {Whats store in public sector accounting (2 marks) G _Explaia four reasons for the acquisition of Unallocat (8 marks QUESTION Six Examine the history of Public Finance (10 marks)Question 1 ; In the management meeting of the Central ‘Bank of Nigeria going on now, 29" of April, 2022 5 to decide on the bidding coming up on Thursday 5* of May, 2022. The following banks have SL COMPULSORY (20 Marks) este se tenty to ptichnes wi thoes ty are rndy to pey ee u $120m Sterling Bank Ple UBA $95m @ the 3m at the rate of rate of 4419 A Central Bank has decided to come to the auction with $650m. You are required to: Calculate the Effective Rate, Marginal Rate, Selling and Buying Rate using the following methods: «Average Pricing Method 5 Marks © Marginal Rate System 5 Marks Dutch Auction System 5 Marks © Modified Dutch Auction System. 5 Marks 20 Marks. Section B (At ttempt any two (2) Questions in this Section. 15 marks each = 30marks) Question Two container loads of 500 second-hand a. ABC Al refrigerators at $20 per refr Itemative Goods Ltd. is importing cS) igerator. The company has two options:155000 16,9050 premium 17.0000 — 17.5080 premium a and assuming a clearing cost of N300,000 il on advise the company on which of the options to opt for considering the total = 10marks Fate fluctuation means unexpected paneer in exchange rates of a country’s = Smarks b : a. st Na epg ‘ —— their b. dee cere Required: Explain any five (5) of such reasons OU tire, Question Four a Discuss the use of Transfer Pricing in Multinational Companies and the Strategic "= 6 marks Factors involved in transfer pricing bb Global Nig. Lid. Is considering expanding its business scape internationally. As the Business Advisory Consultant, the management ofthe company has contacted you for advisory service on impending problems snd associated risks in engaging in international business. associated risks ,ote to the Board on the impending, probes and ‘Omarks Required: Prepare a briefing in engaging in international trade Section € (Attempt any one (!) Question in this Section —10marks) Question Five(marks each = 10marks) ateral financing and lending institutions, and ions; in relative to the purpose of their (Smarks each = 10marks)2021/2022 SECOND SI 3 Credits ‘Total Marks: 60 ‘Time Allowed: 2 hours ACCT 444; FINANCIAL MANAG) Examiner): OLAOYE S.A Pup. KWARBAL J.D Pep. Date: May 2, 2022 INSTRUCTIONS 1, Attempt the compulsory Section C, 2. Students are not required to write their names on the answer Sheets/Booklets. question in Section A, ‘TWO in Section B and ONE in SECTIONA- > COMPULSORY 7 ecently appointed by e major manufacturing co stg set : of the divisions a eee igtoetes See roa hive rece? ot information from the divisional manager, who informed you of some of the challenges he is eine his Postgraduate studies in Accounting, sme topics in Financial Management in studies. He wished you can assist him provide > in understanding sor since His background is in English and Literary solution for His class assignment. --Assignment- in the same line of business, with the same level of IBK Ple and Funmzee Plc are two companies it IBK Pic is entirely equity financed with 2,000,000 risk and having the same profit before interest. — 25k ordinary shares currently quoted at N1.20 ex-div. 1,250,000-25k ordinary shares with market value of N1.00 Funmzee Ple is a geared company with d at par. Both companies ex-div and N1500,000 of 10% irredeemable loan stock currently quote ‘generate an annual profit before interest of N360,000; all profit after interest is distributed as a dividend. Mr Akande who rece: ly returned from the United States of America oy3.62,50! Pt¢ 0s x d weighted average of cost capital ee i . (6M a reasons why bot the term Arbitras ande as. ene his proposed. jocoms pa: couse nis worthwhile both f ciated uncertainty. yet the Jevel of asso ‘ponds into shares (5 Marks) (§ Marks) (5 Marks)(5 Marks) ( Marks) ee possible occurrence 0.4 0.3 03 04 0.6 sorrelation between the possible iSECTION C: Question 5 they will use. There are different theories and Submission decided. These include: ‘ yen A company’s shares have a current market value of $13.00. The most recent annual dividend has just been paid. This was $11.50 per share.A company’s shares have a current market value of $13.00. The most recent annual dividend has just been paid. This was N1.50 per share. Required: Estimate the cost of equity in this company in each of the following circumstances: a) Using the DVM and when the annual dividend is expected to remain $1.50 into the foreseeable future. (2 Marks) b) Using the DVM and when the annual dividend is expected to grow by 4% each year into the foreseeable future. (2 Marks) i d. The CAPM is used, the equity beta is 1.20, the risk-free cost of capital is 5% and the expected market return is 14%. (2 Marks) e. Briefly discuss the differences between the cost of capital, cost of equity, cost of debt and weighted cost of capital. (4 Marks) (Total 10 Marks) Note: Show the formular before solving the problem.We wish you success in your examinations!!! ~ ALBU EXCOS 2022/2023