ABASYN UNIVERSITY

Islamabad Campus
Final Examination- Fall 2019 Semester

Course Code: MG-202 Course Title: Financial

accounting II
Teacher’s Name: Roman Khan Total Marks: 50
Date & Time: 27/12/2019 at 03:00 Total Time: 2 hrs
pm
Student’s Name: Reg. No:
Students are advised to read and follow these instructions:
1. Write your Registration Number and other relevant information on the front page of the answer booklet & sign it
in the appropriate space.
2. Point out any discrepancy (torn pages, loose sheets etc.) to the invigilating staff before writing on it.
3. Do not share/borrow stationery items and calculator during Examination hours.
4. Manage your time according to the marks allotted to the respective questions.
5. Please ensure that the area in your threshold is clean. You will be charged for any material which can be
classified as ‘helping in the paper’ found near you.
6. Ask for clarifications by the Course Instructor only within the first 15 minutes of the start of the paper.
7. Mobile phones are not allowed in the Examination Hall.
8. The marks for each question are written in parentheses ( ).
Question # 01. (10 marks)
Briefly explain: each part carry 2.5 marks.
a) Characteristics of preferred stock and common stock.
b) Changes in accounting principles can effect analysis. How?
c) Corporation is an artificial person in the eyes of law. Explain.
d) What are the different way through which a new partner can enter a partnership?

Question # 02. (10 marks)

a) Anderson Co is going to raise capital to finance assets, since this company is going to take a
start, people do not want to invest till the start of operation. Anderson Co is giving
subscription plan, 500,000 shares of Rupees 10 par value common stock are subscribed at a
price of rupees 30. Subscription for 300,000 shares is collected in full. A partial payment is
received on the other 200,000 shares. Prepare journal entries for the mentioned question..

b) D & N Inc had a Sale of Rs 18 million for the year 2018 and its profit margin is 5% on sale.
The company has 4 million shares of common stock outstanding and 120,000 shares of
convertible preferred stock outstanding. Each share of preferred is convertible into four shares
of common stock. If the preferred Shares are converted and the company issued 20,000 bonus
shares, Calculate:
Primary earnings per share.
Fully diluted earnings per share.
Question # 03. (05 marks)
The owner’s equity accounts for Chromium international are shown here:
Common stock ($5 par value) $5,000,000
Paid in capital 5,000,000
Retained earnings 15,000,000
Total owners equity 25,000,000
a. If Chromium stock currently sells for $30 per share and a 12 percent stock dividend is declared, how
many new shares will be distributed? Show how the equity accounts would change.
 b. Chromium declares a five for one stock split. How many shares are outstanding now? What is the
new par value per share?

Question # 04. (15 marks)

Analyze the following company on the basis of financial ratio.
Question # 05. (10 marks)
The balance sheet and income statement for BB Co. are as follows: Prepare statement of cash flow.