CSS Accountancy & Auditing 2015

PART-II

SECTION-A (COST ACCOUNTING)

Q.2. Pak PVC (Pvt) Ltd. manufactures a high-quality plastic pipe in two departments, Cooking and Molding. After the cooking is completed, the completed units are transferred into the Molding Department, in which pipe is formed. The following data was reported for the

Cooking Department during January 2015:

Pounds in process, May 1...….…………………………………….... 0

Pounds started into production during January………………....….... 185000

Pounds completed and transferred to Molding Department.......…… 175000

Pounds in process, May 31 (materials 100%, conversion 30%) ....….... 10000

Cost added during January:

Materials cost…................................................................................... Rs. 55,500

Conversion cost….…………………………………………………. Rs. 356,000

Required: Prepare a cost of production report for Cooking Department

Q.3. Following data was reported for Ibrahim Cottage Textile for the year ended December 31, 2014:

Administrative Expenses Rs. 150,000

Depreciation, factory equipment 19,000

Direct labor 70,000

Finished goods inventory, beginning 20,000

Finished goods inventory, ending 35,000

Indirect labor 30,000

Insurance, factory equipment 800

Maintenance, factory equipment 6,000

Purchases of raw materials 118,000

Raw materials inventory, beginning 7,000

Raw materials inventory, ending 15,000

Rent, factory facilities 20,000

Sales 800,000

Supplies 4,200

Work in process, beginning 10,000

Work in process, ending 5,000

 

SECTION-B (AUDITING)

Q.4.

(a) Explain the statutory rights and duties of a company auditor.

(b) Explain “Internal controls of an organization”. What are the techniques used

for the evaluation of internal control system? Discuss.

Q.5.

 (a) “Vouching is the essence of Auditing”. Explain. What special points would you

keep in mind while vouching payments?

(b) What is meant by a continuous audit? Why do you think this is necessary?

SECTION-C (INCOME TAX LAW)

Q.6.

 (a) “What are the different types of perquisites enjoyed by the salaried individuals?

Discuss.

(b) Discuss in detail the tax treatment under the income tax ordinance, 2001 for the

following facilities that are provided by employer to the employees.

(i) Entertainment (ii) Loan to employees

(iii) Accommodation (iv) Conveyance

Q.7.

Compute taxable income of Miss. Faryal for the tax year ended on June 30, 2013 on the basis of following information:

Basic Salary 600,000

Dearness Allowance 15,000

Bonus 50,000

Project Allowance 7,000

Entertainment Allowance 5,000

Principal Allowance 25,000

Donation to Shaukat Khanam Memorial Hospital, Lahore 40,000

Donation to University of the Punjab, Lahore 20,000

Zakat paid under the zakat and Ushr Ordinance, 1980 50,000

Overseas allowance 30,000

M.Phil allowance 60,000

Gain on sale of shares of Public Company (Sold within 6 Months) 150,000

Rent from Sublease of property (building) 200,000

Income from Property 300,000

Travelling allowance and Daily allowance (TA/DA) 25,000

Net profit from manufacturing business 100,000

Tax deducted at source from salary 30,000

Tax paid on registration of new locally manufactured motor vehicle 10,000

Efficiency honorarium 18,000

Utilities allowance 20,000

 

SECTION-D (BUSINESS ORGANIZATION AND FINANCE)

Q.8. What are Articles and Memorandum of Association? Explain the basic contents of these documents.

Q.9. Explain the following: (5 each) 20)

(a) Liquidity and effect of short-term loans on liquidity

(b) Capital market and its instruments

(c) Money market and its instruments

(d) Role and functions of Commercial Banks