CSS Accountancy & Auditing 2019

COMPETITIVE EXAMINATION-2019

ACCOUNTANCY AND AUDITING, PAPER-I

PART - II SECTION - I

  1. No. 2. Some amounts are omitted in each of the following financial statements.
  2. Co.

Total assets                       Rs. 37,500 Total liabilities                                 ?

Common stock                          2,500

Retained earnings                    13,500

Revenue                      24,000 Expenses                                         ?

Retained earnings, Jan. 1              ?

Net income                               7,500

Dividends                                 6,000

Retained earnings, Dec. 31 13,500

Instruction: Determine the missing amounts.

  1. No. 3. (a) Burno Co. purchased equipment on Jan. 1, 2005 at a total invoice cost of Rs.280,000, additional costs of Rs.5,000 for freight and Rs.25,000 for installation were incurred. The equipment has an estimated salvage value of Rs.10,000 and an estimated useful life of five years. What is the amount of accumulated depreciation at Dec. 31,2006 if the straight-line method of depreciation is used?

  • A plant asset cost Rs.27,000 when it was purchased on Jan. 1, 2008. It was depreciated by the straight-line method based on a 9-year life with no salvage value. On June 30, 2008, the asset was discarded with no cash proceeds. What gain or loss should be recognized on the retirement? Pass the

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8)

 

 

 

 

 

(6)

 

 

(20)

 

  • On June 30, 2010 B. Co. sells office furniture for Rs.60,000 cash. The office furniture originally cost Rs.150,000 when purchased on Jan 1, 2005. Depreciation is recorded by the straight-line method over 10 years with a Salvage value of 15,000.

  1. No. 4. The balance sheet of AB Ltd. is as under:

(6)      (20)

 

 

 

(20)

 

 

Liabilities Assets
Equity share capital (Rs. 100 each) Retained earning Sundry creditors Bills payable

Other current liabilities

 

1,000,000

368,000

104,000

200,000

20,000

Plant & equipment Land & building Cash

Sundry debtors 360,000 Allowance for B/D (40,000) Inventory

Prepaid expenses

640,000

80,000

160,000

 

320,000

480,000

12,000

   

1,692,000

   
1,692,000
Required:    
Compute the following: 1. Working capital 2. Current ratio  
  3. Quick or liquid ratio 4. Super quick ratio  

 

ACCOUNTANCY AND AUDITING, PAPER-I

SECTION - II

 

 

Q. No. 5. The AB & Co produces a chemical which requires processing in three departments. The following is the data to the operation of department III for September, 2008.

Units in process at start 50% completed as to Mat. & C.C                      5,000 Unit received from Department II                                                                                                            40,000

Unit transferred to finished store room                                                 35,000

Normal units lost                                                                                    1,000

Balance of units is in process:

100% completed as to material & 50% as to C.C.

Cost of beginning inventory     P.D.Rs.10, 000 .Mat.Rs.10, 000. CC. Rs.5000 Cost transferred from Department II

Rs.30, 000

Cost added:

Material                                                                                               Rs. 8,800

Conversion cost                                                                                   Rs.16200

 

Required:        Prepare cost of production report of Department III by Weighted Average.

(20)
Q. No. 6. (a) K Co. was totally destroyed by fire during June. However, certain fragments  of its cost records with the following data were recovered: idle capacity variance, Rs.1,266 favorable; spending variance, Rs.879 unfavorable; and applied factory overhead Rs.16, 234. (10)
    Required:

Determine (1) The budget allowance, based on capacity utilized, and (2) the actual factory overhead.

 
  (b) A Co. uses 100% Bonus plan with a wage rate of Rs.20 per hour and the standard production is 40 units per hour. Bonus will be given for the time saved. Following is the data of Mr. X:  

 

(10) (20)

    Units produced

Monday                360

Tuesday                400

Wednesday           350

 
    Required: Determine Mr. X's total earning, the time saved, daily earnings and the labor cost per unit.  
Q. No. 7. ABC Company's most recent contribution format income statement is shown below:

Total                                   Per Unit

Sales (20,000 units)                                     $300,000                                  $15

Less variable expenses                                   180,000                                     9

Contribution margin                                        120,000                                     6

Less fixed expenses                                          70,000

Net operating income                                      $50,000

 

Required:

Prepare a new contribution format income statement under each of the following conditions.

(a)               Sales volume increases by 15%.

(b)               Selling price decreases by $1.5 per unit, and sales volume increases by 25%.

(c)                Selling price increases by $1.5 per unit, fixed expenses increases by $20,000 and the sales volume decreases by 5%.

(d)               Selling price increases by 12%, variable expense increases by 60% per unit and sales volume decreases by 10 %.

(20)
Q. No.8. The following information is gathered from the labor records of Binamul & Co. Payroll allocation for direct labor is Rs. 1, 31,600

Time card analysis shows that 9,400 hours were worked on productions lines.

Production reports for the period showed that 4,500 units have been completed, each having standard labor time of 2 hours and a standard labor rate of Rs. 15 per hour. Calculate the labor variances.

**********

 

 

COMPETITIVE EXAMINATION-2019 

ACCOUNTANCY & AUDITING, PAPER-II

PART - II SECTION - I (AUDITING)

 

Q. 2. Explain shortly all audit assertions related to class of transactions (revenue and expenses), account balances (assets/liabilities/equities), and presentation & disclosure. (20)
Q. 3. Define and explain different types of audit risks. How these risks are used to manage the audit assignment. (20)
Q. 4. What are Computer Assisted Audit Techniques (CAATs) that can be used in e-commerce environment. (20)
  SECTION - II (BUSINESS TAXATION)  
Q. 5. (a) Explain the concept of input tax, output tax, zero rated supply, exempt supply and input tax credit. (10)
  (b) From the following data, calculate the tax payable by Mr. Aslam for the year ended 30th June 2018:

(i)                 Salary Rs. 19,500 pm.

(ii)               Special pay Rs. 3,000 p.m

(iii)             Bonus for the year Rs. 38,000.

(iv)             Conveyance allowance Rs. 1,500 p.m

(v)                Free accommodation provided by the employer. He was entitled to a house allowance of Rs. 72,000.

(vi)             Medical expenses reimbursed by his employer under the contract of employment Rs. 24,000.

(vii)           Zakat paid under Zakat Ordinance during the year Rs. 11,300.

(viii)         Donation to approved charitable institutions under section 61 Rs. 15,000.

(ix)             Legal expenses during the year Rs. 6,000.

(x)                Amount paid for approved pension scheme during the year Rs. 90,000.

(xi)             Shares of listed companies purchased Rs. 6,000.

(10) (20)
Q. 6. (a) What deductions are profits of a business? not allowed to be deducted before arriving at the taxable (10)

 

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ACCOUNTANCY & AUDITING, PAPER-II

 

 

  • Mohammad Adil received the following emoluments during the year ended 30th June 2018.

(i)         Basic Salary (Scale 55,000-5,000-70,000)                      Rs.60,000 P.M.

  • House rent allowance 25,000 P.M
  • Utilities allowance 14,250 P.M
  • Medical allowance 10,000 P.M.
  • Agricultural income 130,000 P.M.
  • Payment of Loan installment on 06.2018 1,00,000 He claims the following deductions:

  • Zakat paid 67,428
  • Investment in shares 2,25,000

Notes

  • Mohammad Adil received an interest free loan of Rs. 12,00,000 from his employer on 01.07.2017.
  • His employer has provided him a new car to be used for personal and official purposes. The car costs the employer Rs. 15,00,000.

Required. Calculate the tax payable by Mr. Mohammad Adil.

 

 

 

 

SECTION - III (BUSINESS STUDIES AND FINANCE)

  1. 7. (a) Explain Yield To Maturity (YTM), its calculation, and the procedure used to value bonds that pay interest semiannually.

 

  • Joan Messineo borrowed $15,000 at a 14% annual rate of interest to be repaid over 3 years. The loan is amortized into three equal, annual, end-of-year

    • Calculate the annual, end-of-year loan
    • Prepare a loan amortization schedule showing the interest and principal breakdown of each of the three loan
    • Explain why the interest portion of each payment declines with the passage