ICSI Syllabus For Company Accounts Cost and Management Accounting<\/p>\n
Company Accounts, Cost and Management Accounting<\/strong><\/p>\n Time allowed : 3 hours \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 Maximum marks : 100<\/strong> Total number of printed pages : 10<\/strong><\/p>\n NOTE : All working notes should be shown distinctly.<\/strong> Company Accounts, Cost and Management Accounting<\/strong><\/p>\n (c) Gaurav Ltd. had issued 12%, Rs.10,00,000 debentures @ Rs. 100 each in the past. Additional information :<\/strong> 262<\/strong> P A R T \u2014 B<\/strong><\/p>\n (Answer Question No.5 which is compulsory Assets 31.12.2007 31.12.2008 It was found that since the date of signing the agreement, the prices of materials ICSI Syllabus For Company Accounts Cost and Management Accounting Company Accounts, Cost and Management Accounting Time allowed : 3 hours \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 \u00a0 … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":""},"categories":[1,2873],"tags":[],"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/18298"}],"collection":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/comments?post=18298"}],"version-history":[{"count":1,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/18298\/revisions"}],"predecessor-version":[{"id":115916,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/posts\/18298\/revisions\/115916"}],"wp:attachment":[{"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/media?parent=18298"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/categories?post=18298"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.kopykitab.com\/blog\/wp-json\/wp\/v2\/tags?post=18298"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n Total number of questions : 8<\/strong><\/p>\n
\nP A R T \u2014 A<\/strong>
\n(Answer Question No.1 which is compulsory
\nand any two of the rest from this part.)
\n1. (a) State, with reasons in brief, whether the following statements are correct or
\nincorrect :
\n(i) Accounting Standards (AS) are formulated by International Accounting Standard
\nBoard.
\n(ii) A joint stock company cannot purchase its own shares.
\n(iii) If the rate of dividend declared by a company is 22%, then under the Companies
\n(Transfer of Profits to Reserves) Rules, 1975 the percentage of profits to be
\ntransferred to reserves should be 10%.
\n(iv) The law limits the commission in case of issue of shares to 10% of the issue
\nprice of shares and in case of debentures to 5% or such lower rate as is
\nprovided in the articles of association.
\n(v) Contingent liabilities relating to outsiders must be shown on the liability side
\nof the consolidated balance sheet.
\n(2 marks each)
\n(b) Re-write the following sentences after filling-in the blank spaces with appropriate
\nword(s)\/figure(s) :
\n(i) According to the provisions of section 198 of the Companies Act, 1956, maximum
\nlimit on the total managerial remuneration payable by public company is
\n________ of net profits.
\n(ii) A company must pay the dividends within ________ days of its declaration.
\n(iii) Preliminary expense is a ________ asset.
\n(iv) Discount on the issue of debenture is a ________ loss.
\n(v) If the purchase price of the debenture includes the interest for the expired
\nperiod, it is known as ________.
\n(1 mark each)<\/p>\n
\nFor the purpose of redemption, it maintains a debenture redemption fund with an
\nannual contribution of Rs.90,000. On 1st April, 2008, the fund stood at Rs.4,50,000
\nrepresented by 6%, Rs.5,00,000 government loan.
\nOn 31st March, 2009, Rs.2,00,000 government loan was sold @ Rs.93.50 and the
\nproceeds were utilised to purchase debentures for cancellation @ Rs.85 each. Assume
\nthat Rs.20,000 debentures have been redeemed out of capital and the balance with
\nface value of Rs.1,80,000 has been redeemed out of debenture redemption fund
\naccount.
\nPrepare debenture account, debenture redemption fund account and debenture
\nredemption fund investment account.
\n(5 marks)
\n2. (a) Write short notes on any two of the following :
\n(i) Accounting Standard-10 : Accounting for fixed assets
\n(ii) Issue of shares at a discount
\n(iii) Taxation on distributed profits.
\n(3 marks each)
\n(b) Following are the abridged balance sheets of Harry Ltd. and Say Ltd. as on
\n31st March, 2009 :
\nLiabilities Hary Ltd. Say Ltd.
\n(Rs.) (Rs.)
\nEquity share capital (Rs.100 each) 10,00,000 5,00,000
\nGeneral reserve 1,00,000 1,70,000
\nProfit and loss account 1,60,000 1,30,000
\nCurrent liabilities 4,40,000 2,00,000
\n17,00,000 10,00,000
\nAssets
\nFixed assets 4,80,000 2,50,000
\nInvestment in shares of Say Ltd. 5,00,000 \u2014
\nCurrent assets 7,20,000 7,50,000
\n17,00,000 10,00,000
\n1\/2009\/CACMA (NS) P. T. O.
\n: 3 : 262
\nAdditional information :
\n(i) On 1st July, 2008, Hary Ltd. acquired 3,000 shares in Say Ltd. The reserves
\nand surplus position of Say Ltd. as on 1st April, 2008 was as under :
\nGeneral reserve Rs.2,50,000
\nProfit and loss a\/c (Cr.) Rs.1,20,000
\n(ii) On 1st October, 2008, Say Ltd. issued one equity share for every four shares
\nheld as bonus shares out of general reserve. No entry has been made in the
\nbooks of Say Ltd. for issue of bonus shares.
\n(iii) On 30th September, 2008, Say Ltd. declared a dividend out of
\npre-acquisition profits @ 25% on Rs.4,00,000, its capital on that date. Hary
\nLtd. credited the dividend to its profit and loss account.
\n(iv) Say Ltd. owed Hary Ltd. Rs.50,000 for purchase of stock from Hary Ltd. The
\nentire stock is held by Say Ltd. on 31st March, 2009. Hary Ltd. made a profit
\nof 25% on cost.
\nPrepare a consolidated balance sheet of Hary Ltd. and its subsidiary Say Ltd. as
\non 31st March, 2009.
\n(9 marks)
\n3. (a) Abridged balance sheet of Rama Ltd. as on 31st March, 2009 is as follows :
\nLiabilities Rs.
\nShare capital 6,00,000
\nReserves and surplus 50,000
\nBank overdraft 10,000
\nCreditors 60,000
\nProvision for taxation 1,10,000
\nProposed dividend 60,000
\n8,90,000
\nAssets
\nFixed assets 3,70,000
\nCurrent assets 5,20,000
\n8,90,000
\nThe net profits of the company after deducting working expenses but before providing
\nfor taxation were as under :
\nYear Rs.
\n2006-07 3,18,000
\n2007-08 3,40,000
\n2008-09 3,12,000
\n: 4 :
\n1\/2009\/CACMA (NS) Contd…
\n262
\nOn 31st March, 2009, fixed assets were at Rs.4,50,000. Sundry debtors on the
\nsame date included Rs.10,000 which is irrecoverable. Having regard to the type
\nof business, a 10% return on average capital employed is considered as reasonable.
\nAscertain the value of goodwill on the basis of three years purchase of annual
\nsuper profits. Also calculate goodwill by capitalisation of average maintainable
\nprofits. Depreciation on fixed assets is charged @ 10% per annum and the rate
\nof tax is 30%.
\n(6 marks)
\n(b) Following is the profit and loss account of Azad Ltd. for the year ended
\n31st March, 2009 :
\nRs.
\nTo Office and administrative expenses 3,10,000
\nTo Selling and distribution expenses 1,92,000
\nTo Directors\u2019 fees 39,500
\nTo Managerial remuneration 1,70,000
\nTo Interest on debentures 18,500
\nTo Donation to charitable trust 15,000
\nTo Compensation for breach of contract 27,000
\nTo Depreciation on fixed assets 3,12,000
\nTo Investment revaluation reserve 12,500
\nTo Provision for taxation 7,40,000
\nTo General reserve 2,50,000
\nTo Balance c\/d 8,46,500
\n29,33,000
\nBy Balance b\/d 3,43,200
\nBy Gross profit b\/d 24,15,000
\nBy Subsidies 1,39,300
\nBy Interest on investment 9,500
\nBy Transfer fees 1,000
\nBy Profit on sale of machinery (W.D.V. Rs.30,000) 25,000
\n29,33,000<\/p>\n
\n\u2014 Original cost of the machinery sold was Rs.40,000.
\n\u2014 Depreciation on fixed assets as per Schedule XIV of the Companies Act, 1956
\nwas Rs.3,42,000.
\nYou are required to calculate managerial remuneration in the following situations :
\n(i) when there is only whole-time director;
\n(ii) when there are two whole-time directors; and
\n(iii) when there are two whole-time directors, a managing director and a
\npart-time director.
\n(6 marks)
\n(c) Differentiate between \u2018shares\u2019 and \u2018debentures\u2019.
\n(3 marks)
\n4. (a) Jolly Ltd. has the following balance sheet as on 31st March, 2008 :
\nLiabilities Rs.
\nShare capital :
\nIssued, subscribed and fully paid-up (10,000 equity shares of
\nRs.100 each) 10,00,000
\n5,000 Preference shares of Rs.100 each 5,00,000
\nCapital reserve 1,00,000
\nSecurities premium account 1,00,000
\nGeneral reserve 2,00,000
\nProfit and loss account 1,00,000
\nCurrent liabilities 10,00,000
\n30,00,000
\nAssets
\nFixed assets 22,00,000
\nCurrent assets 8,00,000
\n30,00,000
\nThe preference shares are to be redeemed at 10% premium. Fresh issue of equity
\nshares is to be made to the extent it is required under the Companies Act, 1956
\nfor the purpose of this redemption. The shortfall in funds for the purpose of the
\nredemption after utilising the proceeds of the fresh issue are to be met by taking
\na bank loan. Show journal entries.
\n(6 marks)<\/p>\n
\n(b) Silver Ore Co. Ltd. was formed on 1st April, 2007 with an authorised capital of
\nRs.6,00,000 in shares of Rs.10 each. Of these, 52,000 shares had been issued and
\nsubscribed but there were calls-in-arrears on 100 shares. From the following trial
\nbalance as on 31st March, 2008, prepare the trading and profit and loss account
\nand the balance sheet :
\nRs. Rs.
\nCash at bank 1,05,500 \u2014
\nShare capital \u2014 5,19,750
\nPlant 40,000 \u2014
\nSale of silver \u2014 1,79,500
\nMines 2,20,000 \u2014
\nPromotional expenses 6,000 \u2014
\nInterest on fixed deposit upto 31st December \u2014 3,900
\nDividend on investment less 22% tax \u2014 3,200
\nRoyalties paid 10,000 \u2014
\nRailway track and wagons 17,000 \u2014
\nWages of miners 74,220 \u2014
\nAdvertising 5,000 \u2014
\nCarriage on plant 1,800 \u2014
\nFurniture and buildings 20,900 \u2014
\nAdministrative expenses 28,000 \u2014
\nRepairs 900 \u2014
\nCoal and oil 6,500 \u2014
\nCash 530 \u2014
\nInvestments in shares of Tin Mines 80,000 \u2014
\nBrokerage on Tin Mines 1,000 \u2014
\n6% Fixed deposit in Syndicate Bank 89,000 \u2014
\n7,06,350 7,06,350
\nDepreciate plant and railway track and wagons by 10%, furniture and building by
\n5%. Write off one-third of the promotional expenses. Value of silver on
\n31st March, 2008 was Rs.15,000. On 10th December, 2007, the directors forfeited
\n100 shares of which only Rs.7.50 per share had been paid. Ignore corporate
\ndividend tax.
\n(9 marks)<\/p>\n
\nand any two of the rest from this part.)
\n5. (a) State, with reasons in brief, whether the following statements are
\ntrue or false :
\n(i) At break-even point, the company earns only marginal profit.
\n(ii) Fixed cost per unit remains fixed.
\n(iii) Liquidity ratios measure long-term solvency of a concern.
\n(iv) Rent on owned building is included in cost accounts.
\n(v) Job costing can be used in industries using standard costing.
\n(2 marks each)
\n(b) Re-write the following sentences after filling-in the blank spaces with appropriate
\nword(s)\/figure(s) :
\n(i) Inflated price method of valuing material issue is suited when __________.
\n(ii) Abnormal wastage __________ part of cost of production.
\n(iii) __________ in a contract provides that the contract price would be suitably
\nenhanced on the happening of a specified contingency.
\n(iv) Direct material + direct labour + factory overheads = ______.
\n(1 mark each)
\n(c) Distinguish between any two of the following :
\n(i) \u2018Bin card\u2019 and \u2018stores ledger\u2019.
\n(ii) \u2018Fixed cost\u2019 and \u2018variable cost\u2019.
\n(iii) \u2018Absorption costing\u2019 and \u2018marginal costing\u2019.
\n(3 marks each)
\n6. (a) A company has provided you the following details :
\nLiabilities 31.12.2007 31.12.2008
\n(Rs.) (Rs.)
\nShare capital 70,000 74,000
\nDebentures 12,000 6,000
\nReserve for doubtful debts 700 800
\nTrade creditors 10,360 11,840
\nProfit and loss a\/c 10,040 10,560<\/p>\n
\n(Rs.) (Rs.)
\nCash 9,000 7,800
\nDebtors 14,900 17,700
\nStock 49,200 42,700
\nLand 20,000 30,000
\nGoodwill 10,000 5,000
\n1,03,100 1,03,200
\nAdditional information \u2014<\/strong>
\n\u2014 Dividend paid Rs.3,500; and
\n\u2014 Land was purchased for Rs.10,000.
\nPrepare a cash flow statement as per Accounting Standard-3 (Revised).
\n(6 marks)
\n(b) Lookahead Ltd. produces and sells a single product. Sales budget for the calendar
\nyear 2009 for each quarter is as under :
\nQuarter No. of Units to be Sold
\nI 12,000
\nII 15,000
\nIII 16,500
\nIV 18,000
\nThe year 2009 is expected to open with an inventory of 4,000 units of finished
\nproduct and close with an inventory of 6,500 units.
\nProduction is customarily scheduled to provide for two-thirds of the current quarter\u2019s
\ndemand plus one-third of the following quarter\u2019s demand. Thus production anticipates
\nsales volume by about one month. The standard cost details for one unit of the
\nproduct is as follows :
\n\u2014 Direct materials 10 Kgs. @ 50 paise per kg.
\n\u2014 Direct labour 1 hour 30 minutes @ Rs.4 per hour.
\n\u2014 Variable overheads 1 hour 30 minutes @ Re.1 per hour.
\n\u2014 Fixed overheads 1 hour 30 minutes @ Rs.2 per hour based on a budgeted
\nproduction volume of 90,000 direct labour hours for the year.
\nAnswer the following \u2014
\n(i) Prepare a production budget for the year 2009 by quarters, showing the
\nnumber of units to be produced.
\n(3 marks)
\n1\/2009\/CACMA (NS) P. T. O.
\n: 9 : 262
\n(ii) If the budgeted selling price per unit is Rs.17, what would be the budgeted
\nprofit for the year as a whole ?
\n(3 marks)
\n(iii) In which quarter of the year the company is expected to break-even ?
\n(3 marks)
\n7. (a) Material-A is used as follows :
\nMinimum usage \u2013 500 units per week
\nMaximum usage \u2013 1,500 units per week
\nNormal usage \u2013 1,000 units per week
\nOrdering quantities \u2013 1,600 units
\nDelivery period \u2013 4-6 weeks
\nCalculate \u2014
\n(i) Maximum level.
\n(2 marks)
\n(ii) Minimum level.
\n(2 marks)
\n(iii) Ordering level.
\n(2 marks)
\n(b) On 1st July, 2007, Delux Ltd. undertook a contract for Rs.5,00,000. On 30th June,
\n2008 when the accounts were closed, the following details about the contract were
\ngathered :
\nRs.
\nMaterial purchased 1,00,000
\nWages paid 45,000
\nGeneral expenses 10,000
\nPlant purchased 50,000
\nMaterials on hand (30.6.2007) 25,000
\nWages accrued (30.6.2008) 5,000
\nWork certified 2,00,000
\nCash received 1,50,000
\nWork uncertified 15,000
\nDepreciation of plant 5,000
\nThe above contract has an escalation clause which reads as follows :
\n\u201cIn the event of prices of materials and rates of wages increase by more than 5%,
\nthe contract price would be increased accordingly by 25% of the rise in the cost
\nof materials and wages beyond 5% in each case.\u201d<\/p>\n
\nand wage rates increased by 25%. The value of the work certified does not take
\ninto account the effect of the above clause.
\nPrepare the contract account.
\n(6 marks)
\n(c) Differentiate between \u2018Halsey wage plan\u2019 and \u2018Rowan wage plan\u2019.
\n(3 marks)
\n8. From the following information, prepare the projected trading and profit and loss
\naccount for the next financial year ending 31st March, 2009 and the projected balance
\nsheet as on that date :
\nGross profit ratio 25%
\nNet profit to equity capital 10%
\nStock turnover ratio 5 times
\nAverage debt collection period 2 months
\nCreditors velocity 3 months
\nCurrent ratio 2
\nProprietary ratio (Fixed assets to capital employed) 80%
\nCapital gearing ratio (Preference shares and debentures
\nto total long-term funds) 30%
\nGeneral reserve and profit and loss to equity
\nshareholders\u2019 fund 20%
\nPreference share capital to debentures 2
\nCost of sales consists of 40% for materials and balance for wages and overheads. Gross
\nprofit is Rs.6,00,000.
\n(15 marks)<\/p>\n","protected":false},"excerpt":{"rendered":"