THE UNITED REPUBLIC OF TANZANIA

PRESIDENT’S OFFICE, REGIONAL ADMINISTRATION AND

LOCAL GOVERNMENT

FORM SIX SPECIAL SCHOOLS JOINT EXAMINATION

CODE: 153/1 ACCOUNTANCY 1

Time: 3:00 HRS Wednesday 28-February-2024 PM

INSTRUCTIONS

1) This paper consists of sections A and B with a total of eight (8) questions.
2) Answer all questions in section A and three (3) questions from section B.
3) Section A carries forty (40) marks and section B carries sixty (60) marks
4) Non programmable calculators may be used.
5) Cellular phones and any unauthorized materials are not allowed in the examination
room.
6) Write your Name/Examination Number on every page of your answer
sheets/booklet(s).

This paper consists of [6] Printed pages

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 SECTION A
Answer all questions in this section. Each question carries ten (10) marks.
1. Using examples, briefly describe the meaning and importance of the following
Accounting principles.
i. Money measure concept
ii. Going concern concept
iii. Realization concept
iv. Materiality convention
v. Conservatism convention

2. (a). The following transactions belong to MAILA Enterprises for the financial year ends
31st December 2012.
i) Tshs 2,000,000 spent on dismantling, removing and reinstalling plant and
machinery to a more convenient site.
ii) TShs 600,000 paid for removal of stock to a new site
iii) Tshs 1,000,000 paid for erection of a new machine
iv) Tshs 2,000,000 paid on repairing of the new factory.
v) A car’s engine, ring and pistons were changed at a cost of TShs 3,000,000.
This resulted in improvement in mileage to 30 KMs per litre of petrol. It had
fallen from 15 KMs to 8 KMs.
vi) A building constructed in 1947 was depreciated by the year 2012 to TShs
5,000,000. It was demolished and a new building was constructed at a cost of
TShs 300,000,000 including TShs 10,000,000 for demolishing the old
building.
Use the above information to State with reasons which of the above items should be
taken as of a capital nature and which of a revenue nature

(b). Vanessa is a designer of wedding gown. She designs gowns for various brides.
During 2011 she received a total of TShs 2,671,000 as design fees. This total includes a
sum of TShs 45,000 received from a bride whose job she had not started by 11/12/2011.

During 2012 she received a total of TShs 3,427,000 and on 31/12/2012 she owed Tshs
133,000 by a client whose gown she had finished and delivered.
Required;
Show Vanessa’s designing fees account for 2011 and 2012.

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3. The Trial balance as at 30th April 2014 of BWILE plastic limited was balanced by the
inclusion of the following debit balance. Difference on Trial balance suspense Account TZS
2,513,000 subsequent investigations revealed the following errors;
i) Discounts received of TZS 324,000 in January 2014 have been posted to the
debit of the discounts allowed account.
ii) Wages of TZS 2,963,000 paid in February 2014 have not been posted from the
cash book
iii) A remittance of TZS 940,000 received from K. Mwampeta in November 2013
has been posted to the credit of B. Mwansasu limited.
iv) In December 2013, the company took advantage of an opportunity to purchase a
large quantity of stationery at a bargaining price of TZS 2,000,000. No
adjustment have been made in the accounts for the fact that ¾ in value, of this
stationery was in the stock on 30 April 2014
v) A payment of TZS 341,000 to J. Wambura in January 2014 has been posted in
the personal account as TZS 143,000.
vi) A remittance of TZS 3,000,000 received from D. Naamani, a credit customer, in
April 2014 he been credited to sales.
vii) A cheque of TZS 750,000 received for loss of stock by fire had been deposited
in the proprietor’s private bank account
The draft accounts for the year ended 30th April 2014 of Simba plastic Ltd show a net
profit of TZS 24,760,000. Simba plastic Ltd has very few personal accountants and
therefore does not maintain either a purchases ledger control account or sales ledger
control account
Use the above information to:
a) Prepare the difference on trial balance suspense account showing where
appropriate the entries necessary to correct the accounting errors
b) Prepare a computation of the corrected net profit for the year ended 30th
April 2014 following corrections for the above accounting errors

4. The following information is for MOHAMED TRANS LTD, they provided depreciation
from 2003 to 2006 at 10% on diminishing balance method on opening balance of each
item of Machine in use.

The balance of Motor vehicles account at the end of 31st December 2006 was TZS
108,000,000. There were no sales during the year.
However purchases were;
September 2003 TZS 33,600,000
December 2005 TZS 22,800,000
The management decided to change depreciation at 20% on the same method but to be
calculated on the closing balance of each year with retrospective effect from 2003.

During 2007 the Motor vehicle acquired in September 2003 was disposed off on 30th
June, the net proceeds being TZS 15,000,000.
Required;
i) Calculate book value of Motor vehicles on 01/01/2003 before the change of
depreciation policy
ii) What will be the book value of the Motor vehicles at the end of the year 2006 (i.e.
31st December 2006) after the change of depreciation policy? Journalize the
amount of depreciation that to be provided in 2006 as a result of change in
depreciation policy
iii) Prepare ledger accounts for 2006 and 2007

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 SECTION B
Answer three (3) questions from this section. Each question carries twenty (20) marks.
5. The following are the financial statements of KWETU PAZURI CO. LTD for the year
ended 31st December 2012
KWETU PAZURI CO. LTD’S INCOME STATEMENT FOR THE YEAR ENDED 31/12/2012
Credit Sales 3,000,000
Less: cost of goods sold:
Opening stock 1,000,000
Add: purchases 2,050,000
3,050,000
Less: closing stock 800,000 2,250,000
Gross profit 750,000
Less: operating expenses 570,000
Profit before tax 180,000
Less: Provision for taxation 80,000
Profit after tax 100,000
Add: Balance b/d previous year 50,000
Profit available for distribution 150,000

KWETU PAZURI CO. LTD’S STATEMENT OF FINANCIAL PERFORMANCE AS AT

31/12/2012 Tshs
NON-CURRENT ASSETS
Building 650,000
Plant 200,000
Less: Depreciation 50,000 150,000
CURRENT ASSETS
Stocks 800,000
Account receivable 600,000
Cash in hand 300,000
Total assets 2,500,000
EQUITY
Share capital 800,000
Reserves 300,000
Undistributed profit 150,000
NON-CURRENT LIABILITIES
Long-term loan on mortgage 250,000
CURRENT LIABILITIES
Account payable 870,000
Provision for taxation 80,000
Outstanding expenses 50,000
Total Equity and Liabilities
2,500,000

Required;
Name and calculate the ratios which indicate;
a) The rapidity with which accounts receivable are collected
b) The ability of the company to meet its short-term obligations
c) What profitability on capital invested has been obtained
d) The efficiency with which funds represented by inventories are being utilized and
managed
e) The ability of the company to meet quickly demands for payment of amount due
f) The relative importance of proprietorship and liabilities as source of funds

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6. Kiangi company ltd purchased TZS 3,000,000 6% Treasury stock on 1st April 2010 at 70
ex-div. Interest is payable on 1st April and 1st October. On 28 April the company
purchased TZS 2,000,000 6% treasury stock at 80-85 ex-div, brokerage amounted to TZS
1,500. On 31st August the company sold TZS 1,500,000 6% treasury stock at 95 ex-div.

On 1st July 2011 the company sold TZS 1,000,000 6% treasury stock at 90-96 cum-div
brokerage amounted to Tshs 1,000. On 1st November the company purchases TZS
4,000,000 6% treasury stock at 60 cum-div.
Use the above information to prepare the investment Account assuming that the finance
year ends on 31st December each year.

7. Scorpion Head office invoiced to Miami Branch during the year 2016 goods at selling
price amounting to TZS 74,000. The credit sales of the branch were TZS 31,000 and cash
sales TZS 17,000. The branch returned TZS 2,000 stock at selling price, and has returns from
customers amounting to TZS 1,000. The discounts allowed to customers by the branch
amounted to TZS 1,200. However, the beginning and closing stocks of the branch were TZS
15,000 (Cost TZS 11,200) and TZS 39,000 (Cost TZS 32,700). The branch has debtors at
TZS 12,000 at the beginning and TZS 12,200 at the end. Loss through pilferage was
ascertained to be TZS 1,000 (Cost 800). The Head office had beginning and ending stock of
TZS 130,000 and TZS 170,000. The purchases and sales during the year were TZS 313,000
and TZS 372,000 respectively.
Use the given information to prepare the following accounts;
a) Branch stock account
b) Goods sent to branch account
c) Branch debtors account
d) H/O Income Statement for the year ended 31st December 2016.

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8. From the following Trial Balance of Chiding & sons Ltd, prepare Statement of Profit or
Loss for the year ending 31st December, 2020 and the statement of financial position as at
that date.
CHIDING & SONS LTD’S TRIAL BALANCE AS AT 31ST DECEMBER 2020
DETAILS DR (TZS) CR (TZS)
Drawing and Capital 75,000 968,000
Purchases and sales 721,000 950,000
Returns 13,000 27,000
Sundry Debtors and Creditors 182,000 357,500
Stock at 1/1/2012 198,000
Bad debts 30,000
Bills receivables and payables 120,000 140,000
Cash in hand 3,000
Office expenses 62,100
Sales Van 150,000
Sales Van expenses 14,000
Discount 29,100
Rent and rates 107,000
Sundry expenses 226,000
Light and heat 62,000
Telephone charges and Postage 110,000
Furniture 50,000
Printing and stationery 27,500
Commission 84,000
Carriage inwards 32,000
Salaries and wages 205,000
2,471,600 2,471,600
Additional information;
i. Closing stock was valued at TZS 617,000
ii. Depreciate Furniture at 10% and sales van at 20%
iii. Outstanding rent amounted to TZS 9,000
iv. Make a provision for Bad debts at 5% and further Bad debts amounted to TZS 2,000
v. Sundry expenses include TZS 18,000 paid in respect of insurance for the year ending
1st September, 2013.
vi. Light and heat does not include an invoice of TZS 6,000 for electricity for the three
months ending 2nd January, 2013, which was paid in February 2013. Light and heat
also includes TZS 40,000 relating to Salesmen’s commission
vii. Goods costing TZS 12,000 were sold on the approval basis for TZS 15,000 but these
were not approved by the customers as yet.