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Financial Accounting and Cost Accounting
Time allowed – 3 hoursMaximum marks – 100
[N.B. – The figures in the margin indicate full marks. Questions must be answered in English. Examiner will takeaccount of the quality of language and of the way in which the answers are presented. Separate answer scripts should be used for each section. Different parts, if any, of the same question must be answered inone place in order of sequence.]
 
Section I
Marks 50
 
Marks
 
1. (a) What conditions need to be satisfied as per BAS for interest to be treated as revenue? 3(b) What is the objective of BASs followed for (i) Borrowing cost (ii) Inventory (iii)Property, Plant and Equipment? 62. Following are the Trial Balances of A Ltd. and its Rajshahi Branch as on December 31, 2007: 15
Head office(Tk.)Rajshahi(Tk.)Head office(Tk.)Rajshahi(Tk.)
Stock on 1st Jan.200745,00016,400Creditors20,300 5,400Purchases 110,00025,600Goods sent toBranch14,400 -Wages 80,80013,100Sales330,200 69,900Manufacturing Exp 35,4006,800Head Office A/c- 28,000Machinery:Head office 100,000-Capital in Shares of Tk.10 each 200,000-Branch 50,000-Discount earned1,100 300Furniture:Head office 5,000-Branch 2,000-Purchase Returns2,500 600Rent 6,0003,400Salaries 32,00011,000Debtors 38,0008,000General Expenses 18,0004,000Goods receivedfrom Head Office -14,400 Cash in hand and atBank 10,3001,500 Branch Account 36,000-568,500104,200568,500 104,200
 
Closing Stock at head office was Tk.38,700 and at Rajshahi was Tk.28,700. Depreciation is tobe allowed at 10% on machinery and at 15% on furniture. Rent still payable in respect of 2007is Tk.300 (for Branch). Prepare the Trading and Profit and Loss Accounts, and theconsolidated Balance Sheet.3. Following have been extracted from the trial balance of Commercial Banks Ltd. as at 31December, 2007:Tk. Tk.Bills discounted 12,36,00,000Rebate on bills discounted (31.12.2007) 17,53,000Discount received 62,65,000Following have been revealed upon further analysis of the bills discounted:Amount of bills Due dates Rate of discountTk. %27,50,000 31.12.07 6.573,00,000 06.03.08 64,18,00,000 15.03.08 52,19,00,000 18.06.08 6.5
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– 2 –You are required to pass appropriate journal entries for the above and show how the relevantitems will appear in the Profit and Loss Account of the bank for the year to 31 December,2007 and in its Balance Sheet at 31 December, 2007. 10You are further required to write appropriate but short note to the accounts stating the bank’saccounting policy on the items. 34. (a) Explain the terms, surrender value and paid up value used in life assurance business. Whythese can not be found in other insurance business? 4(b) From the following figures appearing in the books of Fire Insurance Division of a GeneralInsurance Company, show the amount of claim as it would appear in its Revenue Accountfor the year ended 31 December, 2007. 9Direct Business Re-insurance(Tk.(million) Tk.(million)Claims received during the year 500 600Claims settled during the year 480 540Claims payable – 1.1.2007 760 1031.12.2007 812 5Management expenses 8Survey fee 3Legal and professional 5
Section II
Marks 50
 
1. (a) State what do you understand by the following terms used in a costing system: (1)Allocation (2) Apportionment and (3) Absorption. 3(b) Your factory buys and uses a component for production at Taka 10 per piece. Annualrequirement is 2000 pieces. Carrying cost of inventory is 10% per annum and orderingcost is Taka 40 per order. The Purchase Manager proposes that, as the ordering cost is veryhigh, it is advantageous to place a single order for the entire annual requirement. He alsosays that, if we order 2,000 pieces at a time, we can get a 4% discount from the supplier. 5Evaluate this proposal and make recommendation.2. (a) Define Specific Order Costing and Operation costing with example. 2(b) Distinguish between Purchase Order and Purchase Requisition. 2(c) Miza Chemicals Ltd. obtain three joint products X, Y and Z from a process. Cost upto thepoint of separation of the products for a particular period amounting to Tk.50,000. Otherparticulars are as follows: 6Product No. of Units Units of raw material usedX 700 200Y 500 300Z 300 5001,500 1,000Apportion the joint cost of Tk.50,000 to products X, Y and Z on the basis of (i) Physicalmeasurement (ii) Average unit cost.3. (a) From the following particulars you are required to workout the earnings of a worker for aweek under (a) Straight Piece Rate (b) Differential Piece Rate (c) Helsey Premium BonusScheme (50% sharing) and (d) Rowan Premium Bonus Scheme: 6Weekly working hours 48Hourly wage rate Tk.7.50Normal time taken per piece 20 minutesNormal output per week 120 piecesActual output for the week 150 piecesDifferential piece rate 80% of piece rate when output is belownormal and 120% of piece rate whenoutput is at or above normal.
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