ACCOUNTANCY AND AUDITING, PAPER-I
PART - II SECTION - I
- No. 2. Some amounts are omitted in each of the following financial statements.
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
Retained earnings, Dec. 31 13,500
Instruction: Determine the missing amounts.
- 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
- 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.
- No. 4. The balance sheet of AB Ltd. is as under:
|Equity share capital (Rs. 100 each) Retained earning Sundry creditors Bills payable
Other current liabilities
|Plant & equipment Land & building Cash
Sundry debtors 360,000 Allowance for B/D (40,000) Inventory
|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
Material Rs. 8,800
Conversion cost Rs.16200
Required: Prepare cost of production report of Department III by Weighted Average.
|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)|
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:||
|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
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 %.
|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.
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.
|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
- 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)
- 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