CWA ICWA Question Papers Foundation Accounting Dec 2011

CWA ICWA Question Papers Foundation

 Accounting Dec 2011

 

This Paper has 68 answerable questions with 0 answered.

P—2(ACT)
Syllabus 2008
Time Allowed : 3 Hours Full Marks : 100
The figures in the margin on the right side indicate full marks.
SECTION I
Answer Question No. 1 which is compulsory and any two
questions from Section I.
1. (a) In each of the following one of the alternative is correct, indicate the correct one. 1×10=10
(i) International Accounting standards are issued by the
(A) International Accounting Board
(B) International Accounting Standards Committee
(C) Institute of Chartered Accountants of India
(D) Accounting Standards Council of America
(0)
(ii) A transaction affects three accounts, one account is debited by Rs. 7,500, another account is credited by Rs. 9,000. Third account will be
(A) Credited by Rs. 7,500
(B) Debited by Rs. 9,000
(C) Credited by Rs. 1,500
(D) Debited by Rs. 1,500
(0)
(iii) Shiva who was a creditor for Rs. 47,000, his account was settled for Rs. 45,850. At the time of settlement, Shiva’s account would be debited by
(A) Rs. 45,850
(B) Rs. 47,000
(C) Rs. 1,150
(D) None of the above
(0)
(iv) Which of the following is a transaction of contra entry?
(A) Purchased goods from X Rs. 10,000
(B) Cash deposited into Bank Rs. 15,000
(C) Paid to Y Rs. 4,800 in full settlement of Rs. 5,000
(D) Shop rent of Rs. 6,000, paid by cheque
(0)
(v) Which of the following is not a business transaction?
(A) Rent paid to Landlord Rs. 5,000
(B) Goods purchased from Z Rs. 20,000
(C) Placed an order to Chandra & Co. for purchasing the goods for Rs. 35,000
(D) Received interest from Bank Rs. 2,000
(0)
(vi) External liabilities are the
(A) Excess of capital over the fixed assets
(B) Excess of capital over the assets
(C) Excess of assets over the capital
(D) Excess of assets over current liabilities
(0)
(vii) Festival advance of Rs. 25,000 as given to employees at the time of Deepawali. It is a
(A) Revenue Expenditure
(B) Capital Expenditure
(C) Deferred Revenue Expenditure
(D) Not an Expense
(0)
(viii) Which of the following is an uncertain liability?
(A) Long Term
(B) Contingent
(C) Current
(D) Fixed
(0)
(xi) Cash column of cash book can never have
(A) Credit balance
(B) Debit balance
(C) Zero balance
(D) None of the above
(0)
(x) Wages paid for installation of Machinery debited to wages account. This is an error of
(A) Omission
(B) Principle
(C) Commission
(D) Duplication
(0)
(b) Fill in the blanks: 1×4=4
(i) Goodwill is a ________________ asset. (0)
(ii) Patent Right is in the nature of ____________ Account. (0)
(iii) Bill of exchange is a ___________________ instrument. (0)
(iv) Payment of Royalties is ________________ expenditure. (0)
(c) State with reasons whether the following statements are True or False: 2×8=16
(i) Profit and Loss Account shows the financial position of the concern. (0)
(ii) Live Stock Account is a nominal account. (0)
(iii) Goods lost by fire are debited to Goods Account. (0)
(iv) Rectification entries are passed in ledger. (0)
(v) Capital is treated as internal liability. (0)
(vi) Closing stock is valued at cost price or market price, whichever is higher. (0)
(vii) Depreciation increases the value of asset. (0)
(viii) Joint Venture is a permanent partnership. (0)
2. (a) Journalise the following transactions in the books for a trader:
2011
Nov. 1 Mr. Dutta was declared insolvent and a sum of Rs. 5,600 would be received instead of Rs. 8,000.
Nov. 4 An old machinery was sold to Rakesh For Rs. 15,000.
Nov. 8 Goods costing Rs. 2,500(sale price Rs. 3,000) withdrawn from business for personal use.
Nov. 12 Purchased furniture from Vikas for shop Rs. 25,000
Nov. 15 Deposited Rs. 80,000 in SBI account.
1×5=5 (0)
(b) Calculate the amount of subscription to be shown in the Income and Expenditure Account for the year ending 31st March, 2011 from the following information:
(i) Subscription received during 2010–11—Rs. 31,500.
(ii) Arrears of subscription of 31.03.2010—Rs. 3,400.
(iii) Subscription received in advance on 31.03.2010—Rs. 2,100.
(iv) Arrears of subscription on 31.03.2011—Rs. 4,700.
(v) Subscription received in advance on 31.03.2011—Rs. 2,150.
3 (0)
(c) Following were the profits for the last 4 years ended 31st December:
31.12.07 = Rs. 27,000; 31.12.08 = Rs. 25,200; 31.12.09 Rs.= Rs. 28,800 and 31.12.10 = Rs. 30,000.

Calculate goodwill at 2½ years purchase of the average profit of last 3 years.

2 (0)
3. (a) Mr.Sinha draws a bill on 1st January, 2009 on Mr. Mane for Rs. 36,000/- for 4 months period. Mane accepts the bill on 2nd January 2009 and returns it to Sinha. Sinha discounts the bill @ 8% p.a. Before due date Mane requests Sinha to accept Rs. 24,000/- in cash and draws a second bill for the balance. Sinha draws a new bill for the balance plus interest @ 12% p.a. for two months, on 4th May as per the request. The bill is sent to the Bank for collection and honoured on due date. Pass journal entries in the books of Mr. Sinha. 6 (0)
(b) Opening stock is 80 percent of the closing stock and average stock is Rs. 36,000,calculate the amount of opening stock and closing stock. 2 (0)
(c) A and B purchased 20 old computers for Rs. 7,250 each in a joint venture and spent Rs. 42,500 on repairs. 17 computers were sold for Rs. 1,95,500 and selling expenses amounted to Rs. 2,125. Unsold computers were taken by A at cost price. Calculate profit on joint venture. 2 (0)
4. (a) Classify the following expenses into capital and revenue expenditure:
(i) White–washing of the factory building Rs. 10,000.
(ii) Re–building expenses incurred for Rs. 25,000.
(iii) Payment of import duty on purchase of raw material.
(iv) Rs.500 paid for removal of stock to a new site.
(v) Expenses incurred in connection with obtaining a licence to start the factory.
(vi) An amount of Rs. 5,000 spent as legal charges for abuse of Trade–Mark.
(vii) The cost of registration of a newly formed company.
(viii) Amount spent on construction of animal–huts.
½x8=4 (0)
(b) Match the following
I II
(i)
(ii)
(iii)
(iv) AS–3
AS–13
AS–16
AS–20 (A)
(B)
(C)
(D) Accounting for Investments
Earnings per share
Cash flow statements
Borrowing costs
1×4=4 (0)
(c) Goods sent to consignee costing Rs. 4,50,000. Consignor’s expenses were Rs. 30,000. 1/5th of the goods were broken in transit and it was treated as normal loss. 4/5th of the remaining goods were sold by consignee. Calculate the value of consignment stock. 2 (0)
SECTION II
Answer Question No. 5 which is compulsory and any two
questions from Section II.
5. (a) In each of the following, one of the alternatives is Correct. Indicate the correct one: 1×9=9
(i) Conversion cost is equal to the total of the
(A) Direct material cost and direct labour cost
(B) Direct material cost and factory overheads
(C) Direct material cost, direct labour cost and factory overheads
(D) Direct labour cost and factory overheads
(0)
(ii) The variable cost per unit is
(A) Variable in nature
(B) Fixed in nature
(C) Semi–variable in nature
(D) None of the above
(0)
(iii) Bincard contains
(A) The value and quantity of material lying in the Bin
(B) The value of material lying in the Bin
(C) The quantity of all kind of materials of stores
(D) The quantity of material lying in the Bin
(0)
(iv) Selling price Rs. 48 per unit; variable cost Rs. 40 per unit and fixed cost Rs. 6,00,000. The Break–even–point in units will be
(A) 15,000 units
(B) 12,500 units
(C) 1,25,000 units
(D) 75,000 units
(0)
(v) Profit–volume Ratio (P/V Ratio) for the firm is 40 per cent and variable cost of a product is Rs. 720 per unit. Its selling price per unit will be
(A) Rs. 1,008
(B) Rs. 1,200
(C) Rs. 1,800
(D) Rs. 1,080
(0)
(vi) Contribution is a sum of
(A) Fixed cost and profit
(B) Variable cost and profit
(C) Variable cost and fixed cost
(D) None of the above
(0)
(vii) Labour turnover is measured by
(A) Separation Method
(B) Replacement Method
(C) Flux Method
(D) All of the above
(0)
(viii) Which of the following items is excluded from cost accounts?
(A) Income tax
(B) Interest on debentures
(C) Cash discount
(D) All of the above
(0)
(ix) Idle time is a
(A) Time spent on production
(B) Unproductive time
(C) Time of work done beyond normal working hours
(D) Time taken by casual labourers/workers
(0)
(b) Fill in the blanks: 1×5=5
(i) At the level of Break–even–sales the profit will be ______________. (0)
(ii) All the indirect costs related to indirect material, indirect labour and Indirect expenses are termed as ___________________. (0)
(iii) Factory cost plus administrative overheads is known as ____________________. (0)
(iv) When the amount of overhead absorbed is less than the amount of overhead incurred, it is called _____________________ of overhead. (0)
(v) For the goods transport company ______________ is the suitable cost unit. (0)
(c) State with reasons whether the following statements are True or False: 2×8=16
(i) Chargeable expenses is an example of fixed cost. (0)
(ii) Costs which are ascertained after they have been incurred, are known as historical costs. (0)
(iii) The total ordering cost and the total carrying cost would be same, if order size is kept at economic order quantity. (0)
(iv) The items consisting of only a small percentage of the total items handled by the stores, but requiring heavy investment, are kept in ‘C’ category under ABC Analysis. (0)
(v) A well satisfied team of workers can raise productivity to a large extent. (0)
(vi) Overtime worked on account of abnormal conditions should be charged to cost of production. (0)
(vii) The P/V Ratio = Profit/Margin of Safety. (0)
(viii) At BEP, Total sales and variable costs are same. (0)
6. (a) Calculate the labour cost chargeable to Job No. 102 in respect of an employee, by using the following details, who is paid according to
(i) Halsey 50% scheme;
(ii) Rowan Scheme
Time allowed
Time taken
Wage rate :
:
:
:
7 hours 30 minutes
6 hours 45 minutes
Rs. 45 per hour
3 (0)
(b) The cost analysis of manufacturing 4,000 units of a product is as follows:
Materials Rs. 80,000; Labour Rs. 50,000; Overhead charges (fixed and variable) Rs. 30,000.
The company produces and sells 6,000 units @ Rs. 45 each and is making a profit of Rs. 35,000.
You are required to find out the
(i) Total amount of fixed overheads and
(ii) Variable overheads per unit.
2×2=4 (0)
(c) Price per unit of material X Rs. 15; annual consumption 60,000 units; ordering cost Rs. 400 per order and annual carrying cost 20 per cent of material cost. Calculate the Economic Order Quantity 2 (0)
(d) In a factory, daily consumption of a component is 300 to 350 units and re–order period is 6 to 10 days. Calculate the re–order level for the component. 1 (0)
7. (a) The following figures are available from the records of Aastha Ltd. as at 31st March.
Particulars 2010(Rs. lakhs) 2011(Rs. lakhs)
Sales
Profit 150
30 200
50
Calculate:
(i) The P/V ratio and total fixed expenses.
(ii) The Break–even level of sales.
(iii) Sales required to earn a profit of Rs. 90 lakshs.
(iv) Profit or Loss that would arise, if the sales were Rs. 280 lakhs.
1×4=4 (0)
(b) The following details are available to you:
Direct material Rs. 4,00,000
Productive wages Rs. 3,00,000
Factory overheads are recovered @ 40 percent on productive wages and administrative overheads are recovered@ 10 percent of factory cost

If the actual factory expenses are Rs. 1,15,000 and administrative expenses are Rs. 85,000, find out the under/over recovery of overheads.

3 (0)
(c) Classify the following costs into fixed, semi–variable and variable costs; ½x6=3
(i) Depreciation of Building (0)
(ii) Power (0)
(iii) Water and Gas (0)
(iv) Salary of Work Manager (0)
(v) Commission to salesman as a percentage of sales (0)
(vi) Showroom expenses (0)
8. Z Ltd. produced 500 units of a product and the following costs were incurred:

Material consumed
Wages paid
Chargeable expenses
Factory overheads
Office overheads
Selling and distribution overheads Rs.
20,000
30,000
2,000
26,000
20,000
10,000
450 units were sold at cost plus 25 per cent on sales. Prepare a statement showing the
(i) Prime cost;
(ii) Factory cost;
(iii) Cost of production;
(iv) Cost of Goods sold;
(v) Profit; and
(vi) Sales.
1×6=6 (0)
(b) If the Opening Stock of finished goods is 3,000 units, the production during the period is 30,000 units. Closing Stock of finished goods is 5,000 units and is Rs. 5 per unit is spent on every unit sold, then find out the total selling expenses. 2 (0)
(c) If the prime cost is Rs. 4,00,000 and factory cost is Rs. 6,40,000 and office overheads are 33⅓percent of the factory overheads, what would be the cost of production? 2 (0)

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