Professional Documents
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CMA Question of ICMAB - April-2010
CMA Question of ICMAB - April-2010
Dr.
Tk.
18,592
6,500
1,800
4,500
52,000
36,000
Cr.
Tk.
Cash
Accounts Receivable
Shop Supplies
Unexpired Insurance
Land
Building
Accumulated Depreciation: Building
1,500
Tools and Equipment
12,000
Accumulated Depreciation: Tools and Equipment
2,000
Notes Payable
4,000
Accounts Payable
2,690
Income Tax Payable
1,560
Unearned Rent Revenue
9,000
Capital Stock
80,000
Retained Earnings
0
Dividends
14,000
Income Statement Accounts:
Repair Service Revenue
171,250
Advertising Expense
3,900
Wages Expense
56,800
Supplies Expense
6,900
Depreciation Expense: Building
1,500
Depreciation Expense: Tools and Equipment
2,000
Utilities Expense
19,400
Insurance Expense
13,500
Income Tax Expense
22,608
________
Total
272,000
272,000
Adjustments:
(a) Shop Supplies used in December Tk. 600.
(b) Portion of Insurance Cost Expired in December Tk. 1,500.
(c) Depreciation on Building for December Tk. 150.
(d) Depreciation of Tools and Equipment for December Tk. 200.
(e) Earned one-third of Rent Revenue collected in advance from Harbor Cab. Tk. 3,000.
(f) Unpaid Wages owed to Employees at December 31, Tk. 1,950.
(g) Interest Payable accrued during December Tk. 30.
(h) Repair Service Revenue earned in December but not yet billed Tk. 750.
(i)
Income Tax Expense for December Tk. 4,020 not accounted for.
Required:
(i)
Ten column worksheet as at December 31, 2009.
(ii) Income Statement for the year ended December 31, 2009.
(iii) Balance Sheet as at December 31, 2009
[Marks: (15+5+5) = 25]
Page 1 of 51
(b)
Sumi and Shuva has been partners for several years, operating FAST MOVES a moving
business. The business has its ups and downs, but overall quite successful. In recognition to
Sumis administrative responsibilities the profit and loss sharing agreement allows her salary of
Tk. 5,000, with the remainder shared equally. On January 1, 2000 Sumi and Shuva has capital
balances of Tk. 14,000 and 9,000 respectively. During 2000 Sumi withdrew Tk. 4,000 cash
from the partnership.
On December 2000 the net income of Tk. 11,000, cash 4000, other assets Tk. 29,000 and
accounts payable Tk. 3,000. Sumi and Shuva liquidate the partnership on January 1, 2001. On
that date other assets were sold for Tk. 35,000, creditors were paid and the partners received the
remaining cash.
Required:
(i)
Prepare a schedule showing how the Tk. 11,000 net income for the year 2000 should be
divided between Sumi and Shuva.
(ii)
Prepare a statement of partners capital accounts and Balance Sheet on December 31,
2000.
(iii) Give the Journal entries for liquidation on January 01, 2001.
[Marks: 15]
= THE END =
Page 3 of 51
Q. No. 5.
(a) What is Office Management?
(b) Discuss the Importance and Necessity of Office Management?
(c) Discuss different Organizational structure of Banking sector, Corporation & Govt.
Office with a diagram.
[Marks: (3+3+9) = 15]
Page 4 of 51
Q. No. 6.
(a) What do you mean by Office Environment?
(b) Discuss the Importance of Office Manual.
(c) Inter Office relationship, Co-ordination, mail operations, different office
correspondence is a must for better management of the office. Do you agree with these
views? and why?
[Marks: (3+3+9) = 15]
Q. No. 7.
(a) Why location, Premises, layout, men and equipments are considered as factors of
efficient office organization?
(b) What are the steps involved in the process of office management?
[Marks: (10+5) = 15]
Q. No. 8.
Write short notes on any five of the following:
(a) E. commerce;
(b) Scientific office management;
(c) Supervising office employees;
(d) Job evaluation method;
(e) Indexing;
(f) Office attendance; and
(g) Training and motivation of employees.
[Marks: (5 x 4) = 20]
= THE END =
Page 5 of 51
Prove that -
Q. No. 3.
(a) Find the present value of Taka 5,000 due 5 years from now if interest is at 4% compounded
semi-annually.
(b) Find the equation of the straight line passing through the intersection of the straight lines
4x 3y 1 = 0,
2x 5y + 3 = 0 and parallel to the line 4x + 5y = 6.
[Marks: (5+5) = 10]
Q. No. 4.
Work out the following:
(i)
cos2t dt
(ii)
logx dx
(iii)
3x 2
2 1 x 3 dx
4x 3
(ii) y = xe x
1 3
x 5 x2 + 28x + 10, where C is the total cost and x is
3
output. A tax rate of Tk.2 per unit of output is imposed and the producer adds its to his cost. If
the market demand function is given by P = 2530 5x, where P is the price per unit of output,
find the maximizing output and price.
[Marks: (5+5) = 10]
Page 6 of 51
x2 1
x2 1
Sin =
DSE
105
120
115
118
130
CSE
108
117
120
130
100
Month
June
July
August
September
October
DSE
127
109
110
104
112
CSE
125
125
120
110
135
Determine the arithmetic mean and standard deviation of the prices of shares. In which market
the share prices are stable?
[Marks: (3+7) = 10]
Q. No. 2.
(a) Discuss the distinctive features of the binomial, passion and normal distributions. When does a
binomial distribution trend to become a normal distribution?
(b) A wholesale distributor of fertilizer products finds that the annual demand for one type of
fertilizer is normally distributed with a mean of 120 tones and standard deviation of 16 tones. If
he orders only once a year, what quantity should be ordered to ensure that there is only a 5
percent chance of running short?
[Marks: (5+5) = 10]
Q. No. 3.
(a) What is business forecasting? What are the assumptions on which business forecasting are
made?
(b) Calculate the trend values by the method of least squares from the following data given and
estimate the sales for the year 2008:
Year
Sale of Tibet Beauty Soap (in million)
2000
12
2001
18
2002
20
2003
23
2004
27
Page 7 of 51
16
23
14
21
17
22
6
16
4
18
5
19
10
18
3
20
(b)
Suppose you are a buyer of large suppliers of light bulbs. You want to test at the 5%
significance level, the manufacturer claims that his bulbs last more than 800 hours. You test 36
bulbs and find that the sample mean X is 8.16 hours and sample standard deviation = 70
hours. Should you accept the claim?
[Marks: (3+7) = 10]
Q. No. 7.
(a)
(b)
The life of tube bulbs of two different companies are given below:
No. of bulbs
Company A
Company B
1000 1200
18
15
1200 1400
22
24
1400 1600
26
30
1600 1800
25
20
1800 2000
9
16
(i)
Which companys bulbs give a higher average life?
(ii) If the prices are same for the bulbs of both companies, which one you will purchase and
why?
[Marks: (3+7) = 10]
Life (in hours)
= THE END =
Page 8 of 51
(c)
Total Cost
(TC)
850
1,600
-
Marginal Cost
per unit
250
-
Average Cost
per unit
550
420
Q. No. 4.
(a) What are the determinants of demand?
(b) What are the types of elasticities of demand? What is the implication of elasticity of
demand for Business?
(c) Calculate price elasticity, income elasticity, and cross elasticity from the following
figures:
Year
Sales in Qty of X No. Price per unit of X Price per unit of
Per Capita
in Tk.
Y in Tk.
income in Tk.
2000
30,000
30
15
20,000
2009
50,000
20
20
30,000
[Marks: (5+7+8) = 20]
Page 9 of 51
Q. No. 5.
(a) What are the advantages of national income as a measure of economic performance of a
country? What are its limitations as indicator of well being of a nation?
(b) How is national income measured in Bangladesh?
(c) From the following data calculate National Income:
Compensation of employees
Business interest payment
Rental income of persons
Corporate Profits
Proprietors income
Corporate Dividends
Social Security contribution
Personal taxes
Interest paid by consumer
Interest paid by Govt.
Govt. and business transfers
Personal consumption expenditure
Taka in crores
1866.3
264.3
34.1
164.8
120.3
66.4
253.0
402.1
64.4
105.1
374.5
1991.9
[Marks: (6+4+10) = 20]
Q. No. 8.
(a) What do you mean by the term back to back letter of credit?
(b) What is the mode of exports financing in Bangladesh?
(c) What are the advantages and disadvantages of pre-shipment inspection in Bangladesh?
(d) What are the main problems faced by the Exporting firms of Bangladesh in doing their
business?
[Marks: (5+5+5+5) = 20]
= THE END =
Page 10 of 51
Q. No. 1.
(a) How the direct and indirect methods differ in their approach to computing the cash provided by
operating activities?
(b) The following are the Balance Sheets of Moonlight Ltd. as at 30 June 2009 and 2008:
Assets
Cash in Hand
Trade Debtors
Stock in Trade
Fixed Assets
Accumulated Depreciation
Investment in B Ltd
Loan Receivable
Total
2009
(Taka)
80,00,000
1,12,80,000
1,85,00,000
3,30,70,000
(1,16,50,000)
30,50,000
27,00,000
6,49,50,000
2008
(Taka)
70,00,000
1,16,80,000
1,71,50,000
2,96,70,000
(1,04,00,000)
27,50,000
5,78,50,000
2009
(Taka)
1,01,50,000
3,00,000
8,00,000
40,00,000
50,00,000
1,50,00,000
2,97,00,000
6,49,50,000
2008
(Taka)
95,50,000
5,00,000
9,00,000
50,00,000
1,50,00,000
2,69,00,000
5,78,50,000
Additional Information:
(i)
On 30 June 2008, Moonlight Ltd. acquired 25% shares of B Ltd. for Tk.27,50,000. On that date
the carrying value of Bs assets and liabilities, approximately their fair value was
Tk.1,10,00,000. B Ltd. reported income of Tk.12,00,000 for the year ended 30 June 2009.
(ii) During financial year 2009, Moonlight lent Tk.30,00,000 to Sunlight Ltd. Sunlight paid the 1st
installment (including interest) of Tk. 3,00,000 on 1st April 2009.
(iii) On 2 July 2008, Moonlight Ltd. sold equipment costing Tk.6,00,000 with a carrying amount of
Tk.3,50,000 for Tk.4,00,000.
(iv) On 30 June 2009, Moonlight Ltd entered into finance lease for machinery. The PV of the rental
payment is Tk.40,00,000 which equals the fair value. Moonlight Ltd. made the first rental
payment of Tk.6,00,000 when due on 2 July 2009.
(v) Net Income for the year 2009 was Tk.36,00,000.
(vi) Moonlight Ltd. declared and paid cash dividend as follows:
Head
2009
2008
Declared
15 June 2009
15 June 2008
Paid
30 August 2009
30 August 2008
Amount
Tk.8,00,000
Tk.9,00,000
Required:
Prepare the cash flow statement following the IAS-7 (indirect basis). Also show your workings.
[Marks: (5+15) = 20]
Q. No. 2.
(a) What effect would the use of the LIFO inventory method have upon the applicability of the
gross profit method of valuing inventory?
(b) The Ainge Company values its perpetual inventory at the lower of FIFO cost or market. The
inventory accounts at December 31, 2009 had the following balances:
Raw Materials
Allowance of Reduce Raw Material Inventory from cost to market
Work in Process
Finish Goods
Page 11 of 51
Taka
81,000
5,700
1,31,520
2,05,200
(c)
Head
Book value Appraisal value
Land
Tk.200,000
Tk.150,000
Buildings
250,000
350,000
Equipment
300,000
300,000
(ii) H. Enterprise purchased stores equipment by making a Tk.2,000 cash down payment and
signing a one year, Tk.23,000, 10% note payable.
(iii) Kim Co. purchased office equipment for Tk.20,000, terms 2/10, n/30. The company
policy was to take the discount facility.
(iv) Kissam Co. received at zero cost a piece of land fro a donor. The appraisal value of the
land is Tk.27,000.
(v) Zabed Traders built a warehouse for Tk.600,000. It could have purchased the building for
Tk.740,000.
Required: Prepare the entries that should be made at the date of each acquisition.
10 year bonds at par valued of Tk.800,000 dated January 1, 2006 bearing interest @ 10%
payable semi-annually on January 1, and July 1, are issued on March 1, 2006, at Tk.102 plus
accrued interest. Give entries on March 1, 2006.
[Marks: (5+10+5) = 20]
Page 12 of 51
Subscriptions were received for 300000 shares of common stock at Tk. 42 and
payable Tk. 22 down and the balance in two equal installments due in November-1
and December-1. On the same date 16500 shares of common stock were issued to
Mr. Williams in exchange for his business. Assets transferred to company were
valued as follows:
Page 13 of 51
Subscriptions were received for 120000 shares of preferred stock at Tk. 45, payable
Tk. 15 down and the balance in two equal installments due November- 1 and
December 1.
Nov. 1
Amounts due on this date were collected from all common and preferred stock.
Nov. 2
Subscriptions were received for 480000 shares of common stock at Tk. 44, payable
Tk. 22 down and the balance in two equal installments due on December 1 and
next January 1, (2002).
Dec. 1
Amounts due on this date were collected from all common stock subscribers and
stock fully paid for was issued. The final installment on preferred stock subscription
was received from all subscribers except on whose installment due on this date was
Tk. 9,000. State corporation laws provide that the company is liable for the return to
the subscriber of the amount received less the loss on the subsequent resale of the
stock. Preferred stock fully paid for was issued.
Dec. 6
Preferred stock defaulted on December 1 was issued for cash at Tk. 36 each stock
was issued and settlement was made with the defaulting subscriber.
= THE END =
Page 14 of 51
Q. No. 1.
(a) Jubayer Company sells a number of products to many restaurants in the area. One product is a
special meat cutter with a disposable blade. Blades are sold in a package of 12 blades at Tk. 20
per package. It has been determined that the demand for the blades is at a constant rate of 2,000
packages per month. The packages cost to the company is Tk. 10 each from the manufacturer
and require a three-day lead time from date of order to date of delivery. The ordering cost is Tk.
1.20 per order, and the carrying cost is 10% per annum. The company uses the economic order
quantity formula.
Required:
(i)
Compute the economic order quantity.
(ii) Compute the number of orders needed per year.
(iii) Compute the cost of ordering and of carrying blades for the year.
(b)
Q. No. 2.
(a) What is the purpose of cost of production report?
(b) Rainbo Company uses process costing in accounting for its production department, which uses
two materials. Material A is added at the beginning of the process. Inspection is at the 90%
stage. Material B is then added to the good units. Normal spoilage units amount to 5% of good
output. Company records contain the following information for January 2010.
Started during the period
10,000 units
Material A
Tk. 13,370
Material B
Tk. 4,500
Direct labor cost
Tk. 37,580
Factory overhead
Tk. 46,975
Transfer to finished goods
7,000 units
Ending inventory (95% complete and include all material B)
2,000 units
Required:
Prepare a cost of production report.
[Marks: (5+15) = 20]
Page 15 of 51
(b)
If Rahat receives 90% of the labor value of time saved during a day, prepare a schedule to
show Rahats pay, using the following headings:
Day
Premium wage
Units Produced
Total Pay
Daily Wage
Labor Cost per Unit
Units Above Standard
Overhead per Unit
Hours Saved
Conversion Cost per Unit
(ii)
If 100 percent bonus plan is used (for each weeks total production), prepare a schedule to
show Rahats pay, using the following headings:
Hours Worked
Base x Efficiency Ratio
Units Produced
Weeks Earnings
Standard Production
Labor Cost per Unit
Efficiency Ratio (nearest %) Base Wage
Conversion Cost per Unit
(iii) If the daily quota of standard production is 96 units and the hourly rate increases 5% for
total wages for each day of quota production and above, prepare a schedule to show
Rahats pay, using the following headings:
Day
Amount Earned
Units Produced
Labor Cost per Unit
Hourly Wage
Conversion Cost per Unit
[Marks: (2+18) = 20]
Q. No. 4.
(a)
Tampa Office Equipment manufactures and sells metal shelving. It began operations on January
1, 2004. Costs incurred for 2004 are as follows (V stands for variable; F stands for fixed):
Direct material costs
Direct manufacturing labour costs
Plant energy cost
Indirect manufacturing labour costs
Indirect manufacturing labour costs
Other indirect manufacturing costs
Other indirect manufacturing costs
Marketing, distribution and customer service costs
Marketing, distribution and customer service costs
Administrative costs
Page 16 of 51
Taka
140,000 V
30,000 V
5,000 V
10,000 V
16,000 F
8,000 V
24,000 F
122,850 V
40,000 F
50,000 F
Page 17 of 51
Q. No. 1.
(a) What do you mean by Management? Explain with example.
(b) To be a successful Manager you must play some certain roles. Do you agree? If yes
then explain the roles.
(c) What are the basic skills to be a good Manager? Explain.
[Marks: (4+4+8) = 16]
Q. No. 2.
(a) Define Managerial Ethics. What is the area of social responsibilities of an organization?
Explain.
(b) There are so many arguments for and against social responsibilities. What are they?
Explain.
[Marks: (8+8) = 16]
Q. No. 3.
(a) Clarify the concepts of operational, financial and strategic control.
(b) Discuss the techniques of controlling quality, cost and productivity.
(c) What are the benefits of TQM?
[Marks: (5+6+5) = 16]
Q. No. 4.
(a) Who is a leader and who is a manager? And who is both, a leader and a manager?
(b) Discuss the emerging approaches to leadership.
(c) Explain the nature of political behavior in an organization.
[Marks: (5+6+5) = 16]
Q. No. 5.
(a) What do you mean by strategic planning?
(b) How would you formulate corporate level strategy and business level strategy?
[Marks: (8+8) = 16]
Two marks are reserved for neatness and relevance
Page 18 of 51
Q. No. 6.
(a) What is Marketing Management?
(b) Define Marketing Mix. What are the 4Ps associated with it?
(c) Differentiate between customers profitability and a profitable customer.
[Marks: (4+4+8) = 16]
Q. No. 7.
(a) What are the differences between selling and marketing?
(b) What is Target Market? Do you think that only a target can satisfy a firm to sell its
product or service? Explain.
(c) What do you mean by Customers Value and customers satisfaction?
[Marks: (4+6+6) = 16]
Q. No. 8.
(a) Why SWOT analysis is necessary?
(b) Discuss the methods of SWOT analysis.
(c) What are the limitations of SWOT analysis?
[Marks: (5+6+5) = 16]
Q. No. 9.
(a) What is meant by marketing strategy?
(b) What factors are considered in developing marketing strategies for a particular concern?
(c) How can you design global marketing strategies for a multinational company?
[Marks: (5+6+5) = 16]
Q. No. 10.
(a) What is product life cycle?
(b) Illustrate with diagram showing the most viable state of the entrepreneurs.
[Marks: (8+8) = 16]
Page 19 of 51
Full Marks :
Q. No. 1.
(a) For a large construction work, which will last four years, management proposes to show
profit/loss on work-in-progress every year. Do you advocate this idea? If so, what precautionary
steps would you suggest in providing such profits?
(b) When may profit and losses on construction contracts first be recognized? How does
recognition of a profit on a construction contract differ from the recognition of a loss?
(c) The following particulars relate to two houses which a firm of builders had in course of
construction under contract:
House A
Tk.
Particulars
House B
Tk.
262,000
331,000
3,000
150,000
139,000
508,000
15,000
7,000
Page 22 of 51
Taka
97,500
100,000
16,000
2,000
2,100
12,000
23,500
6,750
550
4,250
28,000
12,000
19,500
600
13,250
125,000
(70,600)
21,000
99,000
46,500
Tk.
Bills Purchased:
Payable in Bangladesh
Payable outside the Bangladesh
Debts due by Directors or Officers:
Either severally or jointly with other
person fully secured
Debts considered good for which The
bank holds no other security than the
debtors personal security
Cash with other banks in C/A
Debts considered good secured by
personal liability of parties in addition
to that of debtors
Doubtful Debt. (provision to be made)
Building at cost
Debts due by companies in which the
Directors are interested fully secured
Furniture and fixtures at cost
Land and building acquired in
satisfaction of claims at cost
Bills receivable for collection: Payable
in Bangladesh
Payable outside Bangladesh
Loans considered good, fully secured
2,00,00,000
1,00,000
Credits :
Share Capital
Reserves
Fixed Deposits
Saving Deposit
Provident Fund
Tk.
10,00,00,000
7,00,00,000
20,00,00,000
15,00,00,000
1,00,00,000
Current Deposits
27,00,00,000
1,50,00,000
1,00,00,000
10,47,40,000
2,00,00,000
2,00,000
2,00,00,000
42,60,000
40,00,000
5,00,000
3,00,00,000
10,00,000
Contingent Accounts
Bills Payable (Drafts)
3,00,00,000
40,00,000
3,00,00,000
10,00,000
60,00,000
10,00,000
60,00,000
1,80,00,000
47,00,000
41,64,00,000
Bills
Discounted:
Payable
Bangladesh
Payable outside Bangladesh
in
Commission
3,00,00,000
4,00,000
Exchange
Page 23 of 51
40,00,000
2,00,000
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
3,00,00,000
1,60,00,000
7,00,00,000
Brokerage
Rent
Share Transfer Fees
Sundry receipts
9,00,000
5,00,000
10,000
90,000
7,95,00,000
95,00,000
30,00,000
50,00,000
10,00,000
60,00,000
1,00,000
4,50,000
60,00,000
5,00,000
2,00,000
3,00,000
2,50,000
3,00,000
6,00,000
4,00,000
1,00,000
2,00,000
1,00,000
3,00,000
----------------90,64,00,000
Total Credit
----------------90,64,00,000
Q. No. 1.
(a) What is Total Quality Management (TQM)? At what point can a firm consider that TQM is
achieved?
(b) What roles do management accountants play in TQM?
(c) Which of the following cost categories tend to increase during the early years of TQM? Which
of these tend to decrease over the years due to successful TQM? Explain why?
(i)
Prevention;
(ii) Appraisal;
(iii) Internal failure;
(iv) External failure.
[Marks: (5+3+12) = 20]
Q. No. 2.
(a) What is activity-based costing and how can it improve the costing system of an organization?
(b) Describe activity-based management.
(c) Chemical Company uses a traditional two-stage cost allocation system. In the first stage, all
factory overhead costs are assigned to two production departments, A and B, based on machinehours. In the second stage direct labour-hour are used to allocate overhead to individual
products, Premium and Regular.
During 2009 the company has a total factory overhead cost of Tk.1,000,000. Machine-hours in
production departments A and B were 4,000 and 16,000 hours, respectively.
The following information relates to products Premium and Regular for the month of January,
2009:
Premium
200
Tk.100
Tk.25
2
1
Regular
800
Tk.50
Tk.50
2
1
Driver
OH rate
No. of production
Runs
No. of setups
No. of units
No. of shipment
20
800
30
20
Page 25 of 51
Direct Consumption
Premium
Regular
150
300
25
200
50
50
800
100
Units
Sales
Variable costs:
Direct materials
5 pounds @ Tk.2.40
Direct labour
0.5 hours @ Tk.14 per hour
Variable manufacturing overhead
Variable selling and Administrative expenses
Total variable cost
Contribution margin
Fixed costs:
Manufacturing costs
Selling and administrative expenses
Total fixed costs
Operating income
Tk.50.00
Operating Result
October 2009
9,500
Tk.551,000
Tk.12.00
Tk. 7.00
Tk. 2.00
Tk. 5.00
Tk.26.00
Tk.24.00
Tk.50,000
20,000
Tk.70,000
Tk.55,000
24,000
Tk.79,000
Tk.177,100
In preparing the master budget for October 2009 the firm had several expected changes from the
standard cost sheet. The sales price would increase by 8 percent. Its suppliers notified the firm that
materials prices would increase by 5 percent starting October 1. The labor contract that started on
October 1 increased wages and benefits by 10 percent. Fixed manufacturing costs would increase
Tk.5,000 for insurance, property taxes, and salaries. For fixed selling and administrative expenses
there would be a Tk.2,000 increase in managers salaries. Furthermore, the firm plans to spend an
additional Tk.2,000 for advertising during October 2009. The unit sales for October 2009 was
expected to be 10,000 units. Asad Box Fabrications uses JIT systems in all of its operations including
materials acquisitions and product manufacturing.
Required:
(1)
Prepare the master budget and flexible budgets at 9,500 units and at 11,000 units for October
2009.
(2)
Compute the sales volume operating income variances, flexible budget operating income
variance, sales price variances, and flexible budget variable cost variance for October 2009.
(3)
Determine the direct materials prices variance, direct materials usage variance, direct labor rate
variance, and direct labor efficiency variance.
[Marks: 4+ (7+4+5) = 20]
= THE END =
Page 27 of 51
Page 28 of 51
Q. No. 1.
(a) Mr. Kaiser, Managing Director of a multi national company gets the following remuneration,
benefits and allowances during the year ended on 30.06.2009:
(i)
Salary at the rate of Tk.25,000/- per mensem,
(ii) Rent free accommodation (unfurnished), company pays the rent @ Tk.30,000/- per
mensem;
(iii) T.A. & D.A. Tk.1,50,000, residence utility bills Tk.75,000, hospital bills Tk.45,000, club
bills Tk.60,000 are all reimbursed by the company;
(iv) Performance bonus equivalent to 3 months salary and festival bonus equivalent to 2
months salary are paid;
(v) Mr. Kaiser contributes 10% of the basic salary to CPF (recognized) and the company also
contributes the same amount.
Compute total income of M. Kaiser from the above information.
(b) What will happen to the above mentioned company if it pays salary to Mr. Kaiser in cash?
(c) What types of errors are generally fall within the purview of rectification u/s 173? Who can
claim and what is the time limit for claiming rectification u/s 173?
[Marks: (10+2+3) = 15]
Q. No. 2.
Write short notes on the following in relation to Income Tax Ordinance, 1984:
(a) Tax Audit;
(b) Speculative Business;
(c) E-Filing;
(d) Initial Depreciation; and
(e) Rule making power.
[Marks: 52=10]
Q. No. 3.
Differentiate between the following:(a) Normal assessment and Universal self assessment.
(b) Question of law and question of fact.
(c) Income year and assessment year.
(d) Revisional power of CT and Revisional power of IJCT.
(e) T.I.N. and B.I.N.
[Marks: 52=10]
Q. No. 4.
ABC Co. Ltd. is an exporter of jute products manufactured in its mills. Income under the head was
disclosed at Tk.30 million for the assessment year 2009-2010. The DCT at the time of hearing
detected the following facts:
Page 29 of 51
Salary of repatriate consultant engineer, supervised the installation of the jute mills, Tk.5,40,000
was debited in the profit & loss account.
(ii) Depreciation was claimed at Tk.15,00,000 including depreciation on a leasehold machinery of
Tk.12,00,000. Depreciation on it was claimed at Tk.2,40,000. The lease rental for the year was
Tk.1,50,000.
(iii) A BMW jeep was purchased at a cost of Tk.55 lacs. Depreciation on it was charged @20% on
the cost of the vehicle. The amount of depreciation was not shown in the depreciation stated
above.
(iv) A machinery costing Tk.2,00,000 was sold during the year at Tk.3,50,000 which was not
reported in the accounts. Depreciation of Tk.7,500 up to the date of sale on 31.12.08 was
claimed in the accounts. WDV on the date of sale was Tk.92,500.
(v) Interest on loan was claimed at Tk.45,00,000 on a total loan of Tk.3.5 crores. It is ascertained
that an amount of Tk.50,00,000 has been paid as loan to XYZ Ltd. at the time of purchasing a
textile mills on 01.01.09 and Tk.30,00,000 has been paid to one of the Directors to purchase a
flat for him.
(vi) Sundry creditors were shown at Tk.35,00,000. Out of this an amount of Tk.3,00,000 originated
in 2004-05, Tk.3,50,000 in 2005-06, Tk.1,50,000 in 2006-07 and the rest in the current year.
(vii) The company paid advance tax in all Tk.70,50,000. The last assessed income was Tk.25
million.
Compute total income and tax payable by the company.
[Marks: 15]
Q. No. 5.
Mr. A, Mr. B and Mr. C are three partners of ABC& Associates who share profit and loss in 2:2:1
ratio. The profit and loss account for the year ended on June 30, 2009 is given below :
ABC & Associates
Profit and Loss Account
For the year ended on June 30, 2009.
Particulars
Rental expenses
Utilities
Commissions
Advertisements
Miscellaneous Expenses
Interest on Capital :
A - 7,000
B - 7,000
C - 6,000
Salaries :
A 24,000
C 22,000
Net Profit
Amount (Tk.)
Particulars
25,000 Gross Profit
20,000
40,000
15,000
28,000
Amount (Tk.)
5,00,000
20,000
46,000
3,06,000
5,00,000
5,00,000
Other Information:
(i)
Rent includes Tk.15,000 paid to Mr. C who partially owns the business premises.
(ii) Tk. 12,000 of commission is given to Mr. B for his special assignment.
(iii) Miscellaneous expense includes a donation of Tk. 8,000.
(iv) Partners have income from different sources as follows:
Page 30 of 51
Mr. A
(Tk.)
50,000
40,000
28,000
Mr. B
(Tk.)
70,000
50,000
Mr. C
(Tk.)
60,000
80,000
15,000
Q No. 7.
(a) XYZ Ltd imports A4 size paper from Singapore. Invoice Value is $3000(C&F), Exchange rate
is 1$=70TK, Customs Duty is 25%, Supplementary Duty is 35%, AIT is 3%, (Consider 1%
Handling charge and 1% Insurance fees). Calculate Customs Duty, VAT, Supplementary Duty
and Total Tax Liability of XYZ Ltd at the import stage.
(b) What are the salient features of valid gift? Who can make a valid gift?
(c) Why is Baggage rule necessary? Mention at least five consumable items which are tax free
under baggage rules at the Airport.
[Marks: (3x5) = 15]
= THE END =
Page 31 of 51
Credits
A$8,820 Accumulated depreciation
14,400 Accounts payable
17,200 Payable to A & Co. Inc.
Page 32 of 51
12,000
10,760
2,160
Q. No. 2(contd.....)
Plant & Equipment
Cost of goods sold
Depreciation expense
Operating expense
Interest expense
Dividend declared
DC & Co.
Tk. 19,600
30,000
62,000
56,000
Tk.167,600
Page 33 of 51
HC & Co.
Tk.8,000
20,000
56,000
84,000
Q. No. 3(contd.....)
Accounts payable
Common stock
Retained earnings
Total liabilities & equity
14,000
40,000
113,600
Tk.167,600
4,000
30,000
50,000
Tk.84,000
DC & Co. Purchased the shares of HC & Co, at book value on January 1, 2005. On December 31,
2006. DC & Co.s balance sheet contains inventories items purchased from HC & Co. for Tk.19,000.
The item cost of HC & Co. Tk.11,000 to produce. In addition HC & Co.s inventories contain goods it
purchased from DC & Co. for Tk.5,000 that DC & Co. had produced for Tk.3,000.
Required:
(i)
Prepare all eliminating entries needed to complete a consolidated balance sheet work paper as
of December 31, 2006.
(ii) Prepare a consolidated balance sheet work paper as of December 31, 2006.
[Marks: (5+5+10) = 20]
Q. No. 4.
(a) Define Dilutive and Antidilutive securities. How they affect the computation of EPS?
(b) At December 31, 2009 the financial statements of Pubali Co. Ltd. included the following:
Net income for 2009
Tk.5,30,000
Common stock, Tk. 10 par:
Shares outstanding on 01.01.2009
1,50,000 shares
Shares retired for cash on 01.02.2009
24,000 shares
Shares sold for cash on 01.09.2009
18,000 shares
2 for 1 stock split on July 23
preferred stock, 10% Tk. 10 par, Cumulative, nonconvertible
Tk. 70,000
Preferred stock, 8%, Tk. 1 par, Cumulative, Convertible into
4,000 shares of common stock
Tk. 1,00,000
Common stock warrants outstanding for 4,000 shares of common stock, the exercise price is Tk. 15.
Additional data:
The market price of the common stock averaged Tk. 20 during 2009.
The convertible preferred stock had been issued at par in 2007.
The tax rate for the year was 40%.
Required:
(i) Basic; and (ii) Diluted earnings per share for the year ended December 31, 2009.
[Marks: (5+6+9) = 20]
Q. No. 5.
(a) Give four different transactions originating with the branch that affect the reciprocal accounts.
(b) The Sunrise Company opened its Riverside Branch on January 1, 2009. The home office will
ship merchandise to the branch at 40% mark-up on cost. Both home office and branch uses
perpetual inventory system. The following transactions took place during the year:
(i)
The Sunrise Company transferred Tk. 50,000 by cheque to the branch.
(ii) The home office shipped merchandise costing Tk. 40,000 to the branch.
(iii) The branch received an equipment costing Tk. 42,000, purchased by the home office. The home
office maintains all fixed assets accounts.
(iv) The branch purchased additional merchandise costing Tk. 35,000 on account.
(v) The branch returned damaged merchandise with a billed price of Tk. 3,500 to the home office.
(vi) The branch sold 2/3rd of the inventory received from home office:
In cash
Tk. 20,000
On account Tk. 40,000
(vii) Branch collection on credit sales Tk. 40,000
Page 34 of 51
Q. No. 5. (contd.....)
(viii) Branch cash expenses for the year are as under:
Advertising
Tk. 2,000
Salaries
Tk. 5,000
Utilities
Tk. 1,000
Maintenance
Tk.
500
Miscellaneous
Tk.
100
(ix)
Depreciation expense for the year recorded by home office on assets used by the branch totaled
Tk. 1,500.
(x)
Required:
(i)
Record the transactions on the books of both home office and branch in Journal.
(ii)
(iii) Prepare the adjusting and closing entries on the home office books.
[Marks: (2+10+4+4) = 20]
= THE END =
Page 35 of 51
2/3
1/6
Cost data:
Work in process- Beginning inventory:
Cost form preceding dep.
Tk.2,260
Tk.3,000
Materials
Tk.1,960
Tk.60
Labor
Tk.770
Tk.350
Tk.130
Factory overhead
Tk.1,060
Tk.200
Tk.100
Cost added during period:
Materials
Tk.29,040
Tk.1,230
Labor
Tk.10,430
Tk.13,400
Tk.2,870
Factory Overhead
Tk.15,740
Tk.8,550
Tk.2,460
Required:
(a) Compute the equivalent units of production for each department.
(b) Prepare a combined cost of production report for September. (Carry unit cost computations to
five decimal places).
[Marks: 4+4+(6+6)= 20]
Page 36 of 51
Tk.3.00
Tk.12.00
Tk.1.50
Tk.1.10
Tk.2.60
Tk.17.60
Page 38 of 51
Page 39 of 51
= THE END =
Page 41 of 51
Q. No. 1.
(a) What do you know about limitation of scope of audit and as an Auditor what will be your
responsibilities in this regard?
(b) What is meant by the concept of Audit Methodology and Audit Administration?
(c) Define related party transaction. How can you verify the related party transactions at the time of
audit?
[Marks: (5x3) = 15]
Q. No. 2.
(a) Explain the meaning and significance of the harmonization of financial reporting and audit
practice in the context of corporate development of Bangladesh.
(b) X Ltd., a newly established company has invited your firm as the first Auditor of the Company.
Keeping in mind ISA-210 Terms of Audit Engagements, you are required to write a formal
letter to the directors setting out the responsibilities for the companys financial statements for
directors as well as your firm as auditors.
[Marks: (10+5) = 15]
Q. No. 3.
Under the code of Ethics for professional Accountants, issued by IFAC, a Professional Accountant in
public practice is required to comply with some fundamental principles. In the light of the IFAC code,
you are required to:
(i)
State and discuss FIVE fundamental principles;
(ii) State FIVE broad categories of threats encountered by the professionals.
(iii) State FIVE safeguards that may be created by the profession, legislation or regulation to
eliminate or reduce the threats.
[Marks: (5+5+5) = 15]
Q. No. 4.
(a) Do you think that introduction of Cost Audit would be beneficial for the economy of
Bangladesh?
(b) Write down the provision of Cost Audit in the Companies Act, 1994.
[Marks: (5+5) = 10]
Q. No. 5.
(a) What do you understand by the term Computer Assisted Audit Techniques? What are
common types of CAATs applicable in EDP environment?
(b) Discuss the design and control procedures which the auditor should adopt in applying CAAT in
an audit under EDP environment.
(c) To what extent can the external auditor of a company rely upon the efficacy of an internal
control system to reduce the extent of his checking the transactions?
[Marks: (5+4+6) = 15]
Page 42 of 51
Page 43 of 51
1
5,000
5,000
Financial plan
2
3
7,500 2,500
2,500 7,500
12%
[Marks: (3+2+20) = 25]
Page 44 of 51
Page 45 of 51
Q. No. 1.
(a) Discuss in brief the theory of Total Quality Management (TQM).
(b) Differentiate between the production view of quality and customer view of quality.
(c) What are the technicians and tools used for analytical problem solving in production quality
areas?
(d) How is risk defined in capital budgeting analysis? List several aspects of a project in which risk
is involved; and how can risk affect the net present value of a project?
Marks: (4 5) = 20
Q. No. 2.
Siraj wholesaling is considering the purchase of a computerized system to track its delivery trucks and
vans. The new system would lower operating costs by coordinating delivery vehicles and drivers to
reduce total miles traveled per taka of revenue. The technology would cost Tk.6,00,000 and have an
expected life of 6 years with an expected salvage value of Tk.50,000 at the end of its life. Near the
end of the fourth year, it is anticipated that the communication equipment in the new system would
require maintenance by the manufacturer costing Tk.75,000. This amount is fully deductive for tax
purpose in the year incurred. Management requires that investments of this type be paid back in 5
years or less. Cost savings are anticipated to be Tk.1,45,000 in each of the first four years and
Tk.1,00,000 in each of the last two years. The companys discount rate is 10 percent; its tax rate is 35
percent and the equipment would be depreciated for tax purposes using the straight line method with
no consideration of salvage value over a period of 5 years.
Required:
(a) Prepare a timeline for displaying cash flows. Be certained to consider the effects of taxes;
(b) Calculate the after tax pay back period;
(c) Calculate the after tax net present value on the project; and
(d) Discuss the appropriateness of making such an investment.
Marks: (4 5) = 20
Q. No. 3.
SAF Industries is one of the larger units of Akij Group. SAF produces numerous products used in
leather goods. For 2007 Akij group and SAF executive negotiated performance targets for SAF as
follows:
Performance measure
Profit margin
Asset turnover
Return on investment
Residual Income (target return rate is 10%)
Actual results and other data for 2007 are summarized below:
Total assets at the beginning of the year
Total assets at the end of the year
Sales
Operating expenses .
Page 46 of 51
Target level
7%
2 times
14%
Tk.5,20,000
Tk.1,22,00,000
1,46,00,000
2,45,60,000
2,27,20,000
Tk.40,000
30,000
Tk.10,000
Tk.1,00,000
5 years
2 years
Tk.10,000
0
Tk.4,000
Present machine
New machine
Sales of products
Tk.4,00,000
Tk.4,00,000
Direct material costs
90,000
90,000
Direct labour costs
80,000
60,000
Variable overhead
48,000
36,000
Fixed overhead exclusive depreciation
1,00,000
1,00,000
Depreciation
10,000
1,00,000
Required:
(a) Identify the relevant items and irrelevant items;
(b) Prepare a comparative income statement for both the machines; and
(c) Using only relevant costs, analyze whether it is desirable to purchase the new machine?
Marks: (6+8+6) = 20
Q. No. 5.
Qusem industries are a decentralized organization with six divisions. The companys electrical
Division produces a variety of electrical items, including an X52 electrical fitting. The Electrical
Division (which is operating at capacity) sells this fitting to its regular customers for Tk7.50 each; the
fitting has a variable manufacturing cost of Tk 4.25.
Page 47 of 51
Tk. 22.50
5.00
14.00
8.00
Tk. 49.50
Although Tk. 5 price for the X52 fitting represents a substantial discount from the regular Tk.
7.50 price , the manager of the Brake Division believes that the price concession is necessary if
his division is to get the contract for the airplane brake units. He has heard through the
grapevines that the airplane manufacturer plans to reject his bid if it is more than Tk. 50 per
brake unit. Thus if the Brake Division is forced to pay the regular Tk. 7.50 price for the X52
fitting , it will either not get the contract or it will suffer a substantial loss at a time when it is
already operating at only 50% of capacity. The manager of the Brake Division argues that the
price concession is imperative to the well-being of both his division and the company as a
whole.
Qusem Industries use return on investment (ROI) and Taka profit in measuring divisional
performance.
Required
(a) Assume that you are the manager of the Electrical Division. Would you recommend that
your division supply the X52 fitting to the Brake Division for Tk. 5 each as requested?
Why or why not? Show all computations.
(b) Would it be to the economic advantage of the company as a whole for the Electrical
Division to supply the fittings to the Brake division if the airplane brakes can be sold for
Tk 50? Show all computations, and explain your answer.
(c) In principle, should it be possible for the two managers to agree to a transfer price in this
particular situation? If so, within what range would that transfer price lie?
(d) Discuss the organizational and managerial behavior problems if any, inherent in this
situation. What would you advise the company's President to do in the situation?
Marks: (4 x 5) = 20
= THE END =
Page 48 of 51