CMA Question of ICMAB-August 2012

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA AUGUST 2012 EXAMINATION

FOUNDATION LEVEL
SUBJECT: 001. PRINCIPLES OF ACCOUNTING
Time: Three hours
Full Marks: 100
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.
Q. No. 1.
(a) Why do accrual basis financial statements provide more useful information than cash basis financial
statements?
(b) The trial balance of GLOBE ENTERPRISES contained the following accounts at November 30,
2011, the end of the companys fiscal year.
GLOBE ENTERPRISES
Trial Balance
November 30, 2011
Cash
Accounts Receivable
Merchandise Inventory
Store Supplies
Store Equipment
Accumulated Depreciation Store Equipment
Delivery Equipment
Accumulated Depreciation Delivery Equipment
Notes Payable
Accounts Payable
Mannan Capital
Mannan Drawing
Sales
Sales Returns and Allowances
Purchases
Purchase Returns and Allowances
Purchase Discounts
Freight in
Salaries Expenses
Advertising Expenses
Utilities Expenses
Repair Expenses
Delivery Expenses
Rent Expenses
Total
Page 1 of 66
Debit (Tk.)
83,500
1,68,500
1,90,000
27,500
4,25,000
Credit(Tk.)
90,000
2,40,000
30,000
2,55,000
2,42,500
5,50,000
60,000
37,33,000
21,000
25,18,000
34,500
18,500
54,000
7,00,000
1,32,000
70,000
60,500
83,500
1,20,000
49,53,500
=========
49,53,500
=========

FOUNDATION LEVEL
Q. No. 1. (contd)
Adjustment data:
1. Store supplies on hand totaled Tk.17,500 .
2. Depreciation is Tk.45,000 on the store equipment and Tk.35,000 on delivery equipment .
3. Interest of Tk.55,000 is accrued on notes payable at November,30, 2011.
4. Merchandise inventory on hand at November 30,2011 is Tk.2,25,000.
5. Salaries expenses is 70% selling and 30% administrative.
6. Rent expenses and utilities expenses are 80% selling and 20% administrative.
7. Tk.1,50,000 of notes payable are due for payment next year .
8. Repair expenses is 100% administrative.
Required:
(i) Enter the trial balances on a work sheet and complete the work sheet.
(ii) Prepare a multiple step income statement and owners equity statement for the year and a
classified balance sheet as of November 30, 2011.
(iii) Journalize the adjusting entries.
[Marks: (10+10+5) = 25]
Q. No. 2.
Zobayer Siraj, a former professional tennis star operates his own tennis shop, ZS Tennis Shop. At the
beginning of the current season his business holds the following inventory balances.
No. of units
Racquets
Tennis shoes
Shirts and Shorts
10
20
35
Cost price
per unit
Tk. 400
250
300
Selling price
per unit
Tk. 850
600
750
The following transactions were completed during June:

June
04:
06:
08:
12:
15:
16:
17:
20:
22:
25:
Purchase 30 racquets from Reeve Co. @ Tk. 450 each; FOB destination, terms 1/10,
n/60. The appropriate party paid the freight cost of Tk. 200.
Received credit of Tk. 450 from Reeve Co. for a damaged racquet that was returned.
Sold tennis shoes of 5 units to members; FOB shipping point, terms 2/10, n/30. The
appropriate party paid the freight cost of Tk. 100.
Purchase Shirts and Shorts from Lee Enterprise Tk. 2,400; FOB shipping point, terms
3/15, n/25. The appropriate party paid the freight cost of Tk. 150.
Paid Reeve Co. in full.
Sold racquets of 15 units to DD Enterprise for cash; FOB Destination. The appropriate
party paid the freight cost of Tk. 300.
Receive cash payment from members for the merchandise sold on June 8.
Purchase supplies on account Tk. 500 from Lesner Supply Co.
Made refund of Tk. 1,700 to DD Enterprise for merchandise returned by them.
Paid Lee enterprise in full.
Required:
Journalize the June transactions using a perpetual inventory system. ZS Tennis Shop applies FIFO
method to value inventories.
[Marks: 20]
Page 2 of 66

FOUNDATION LEVEL
Q. No. 3.
Mr. Omayer has received his bank statement for the month ended 31st October 2011. At the date, his
balance as per bank statement is Tk. 14,130 whereas his own cash book showed a balance of Tk. 47,330.
His accountant investigated the matter, and discovered the following discrepancies:
(a)
Bank charges of Tk. 60 had not been entered in the cash book.
(b)
Checks drawn by Omayer totaling Tk. 450 had not yet been presented to the bank.
(c)
Omayer had not entered receipts from a customer of Tk. 530 in his cash book.
(d)
The bank had not credited Omayer with receipts of Tk. 1,970 paid into the bank on 31st October
2011.
(e)
Standing order payments against a loan amounting to Tk. 1,240 had not been entered in the cash
book.
(f)
Omayer had entered a payment to suppliers of Tk. 560 in his cash book as Tk. 650.
(g)
A check received for Tk. 300 from a debtor had been returned by the bank marked refer to drawer,
but this had not been written back in the cash book.
(h)
Omayer had brought down his opening cash book balance of Tk. 6,585 as a debit balance instead of
as a credit balance.
(i)
An old check payment amounting to Tk. 880 had been written back in the cash book, but the bank
had already honoured it.
(j)
Some of Omayers customers had paid to settle their debts by direct debit. Unfortunately, the bank
had credited some direct debits amounting to Tk. 16,650 to another customers account.
Required:
(i) Prepare a statement showing Omayers adjusted cash book balance as at 31stOctober 2011.
(ii) Prepare a bank reconciliation statement as at 31st October 2011.
(iii) Journalize the errors to rectify bank balance.
[Marks:(6+7+7) = 20]
Q. No. 4.
(a)
Goodwill has been defined as the value of all favorable attributes that relate to a business enterprise.
What type of attributes could result in goodwill?
(b)
In the fourth year of an assets 5-years useful life, the company decides that the asset will have a
6-years service life. How should the revision of depreciation be recorded?
(c)
Plant and machinery costing Tk. 50,000, was purchased on 1 April 2009. This was depreciated for
two years at 20 per cent using the reducing balance method. On 1 April 2011 the machinery
(original cost Tk. 25,000) was sold for Tk. 12,000. Replacement machines were acquired on the
same date for Tk. 34,000. What was the net book value of plant and machinery at 1 April 2012?
[Marks: (3+4+8) = 15]

Q. No. 5
(a) The key to successful business operations is effective inventory management- Do you agree?
Explain.
Page 3 of 66

FOUNDATION LEVEL
Q. No. 5. (contd)
(b)
The management of ROBINSON CORPORATION is revaluating the appropriateness of using its

present inventory cost flow method, which is average cost. They request your help in determining
the results of operations for 2011 if either the FIFO method or the LIFO method had been used. For
2011, the accounting records show the following data:
Inventories
-------------------------------------------------Beginning (75,000 units) Tk.1,70,000
Ending
(1,00,000 units)
Purchase and Sales

--------------------------------------------------------Total net Sales (11,25,000 units) Tk. 43,25,000
Total cost of goods purchased
28,92,500
(11,50,000 units)
Purchases were made quarterly as follows :

Quarter
1
2
3
4
Units
3,00,000
2,50,000
2,50,000
3,50,000
11,50,000
Unit cost (Tk.)

2.30
2.50
2.60
2.65
Total cost (Tk.)

6,90,000
6,25,000
6,50,000
9,27,500
28,92,500
Operating expenses were Tk.7,35,000 and the companys income tax is 30% .
Required:
(i) Prepare comparative condensed income statement for 2011 under FIFO and LIFO
(Show computations of ending inventory).
(ii) Answer the following question for management:
(a) Which cost flow method (FIFO or LIFO) produces the more meaningful inventory amount
for the balance sheet? Why?
(b) Which cost flow method (FIFO or LIFO) produces the more meaningful net income? Why?
(c) Which cost flow method (FIFO or LIFO) produces the more likely to approximate actual
physical flow of goods? Why?
(d) How much additional cash will be available for management under LIFO than under FIFO?
Why?
(e) Will gross profit under this average cost method be higher or lower than (a) FIFO and (b)
LIFO? (It is not necessary to quantify your answer)
[Marks: {5+ (10+5)} = 20]
= THE END =
Page 4 of 66

CMA AUGUST, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT
Time: Three hours
Full marks: 100

Answer THREE questions from each part, where Q. No. 4 and Q. No. 8 are compulsory.


Use a fresh sheet for answering each question.

All questions must be answered in English.
PART-A: BUSINESS COMMUNICATION
Q. No. 1.
(a) Briefly discuss the role and importance of communication in management.
(b) Show the distinction between internal and external communication with examples from the
business world.
(c) List and explain three important barriers in interpersonal communication.
[Marks: (5+4+6) = 15]
Q. No. 2.
(a) Reports are lengthy and boring. Why write them? Discuss
(b) What are the main factors to be considered while drafting a report?
(c) Your HR Manager is planning to hire a new Chief Accountant for the company. You are required to
draft a suitably worded advertisement to be published in a local newspaper.
[Marks: (4+4+7) = 15]
Q. No. 3.
(a) List and discuss six types of Non Verbal Communication.
(b) A speaker must read the reaction of his audience correctly. Discuss this statement giving
examples of different types of audience cues.
(c) A well written business letter should not only be a medium of communication , but also a way to
create goodwill between the two parties. Discuss.
[Marks: (6+5+4) = 15]
Q. No. 4.
(a) Recently your company has received some defective goods from a supplier. You are required to
draft a letter to the supplier informing him about the matter and seeking compensation.
(b) Discuss the importance of e-communication in todays business.
(c) What are the different styles used in writing a letter. Highlight & discuss the style you prefer.
(d) Your office is planning to hold a picnic in Gazipur. You are required to draft an Office Notice
informing all employees about this. You are requested to use your imagination with regard to the
details.
[Marks: (5+5+5+5) = 20]
Page 5 of 66

FOUNDATION LEVEL
SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT
PART-B: OFFICE MANAGEMENT
Q. No. 5
(a) Managing an office is all about ensuring that the work gets done. Do you agree? Discuss.
(b) Ethical standards play a vital role in any organization. Discuss this statement explaining how you
can design a set of ethics in an Organization.
(c) We need to have manuals for each activity in an office. Discuss this statement.
[Marks: (5+5+5) = 15]
Q. No. 6.
(a) Motivating employees costs money. So, why do it. Do you agree? Discuss the statement
highlighting the importance of employee motivation.
(b) List and discuss the comparative merits and demerits of centralized & decentralized record
management system.
(c) Discuss the factors to be considered in selecting an office building site.
[Marks: (5+5+5) = 15]
Q. No. 7.
(a) Good Office environment promotes harmony between employer & employees. Discuss.
(b) A companys salary structure must be fair & equitable to all. Do you agree? Highlight in your
answer the major factors to be considered when setting salaries & fringe benefits in an
organization.
(c) The system of filing used must ensure easy accessibility of the files. Discuss this statement;
highlighting the different methods of filing used.
[Marks: (5+5+5) = 15]
Q. No. 8.
Write short notes of any Five of the following:
(a)
Job specification.
(b)
Office automation.
(c)
Organization chart.
(d)
Corporate Governance.
(e)
Records Management.
(f)
Management Information System (MIS).
(g)
E-Commerce.
(h)
Curriculum Vitae.
[Marks: (5x4) = 20]
==THE END==
Page 6 of 66

FOUNDATION LEVEL
SUBJECT: 003. QUANTITATIVE TECHNIQUES
Time: Three hours

Answer any TEN questions, FIVE from each part.

All questions carry equal marks.


Full marks: 100
PART-A: BUSINESS MATHEMATICS

Q. No. 1.
(a)
(b)
For any Three sets A, B, C prove that

(i)
A (B C)
(ii)
A (B C)
( A B) ( A C )
( A B) ( A C )
Mr. Rahman can purchase a machine by Paying Tk. 40,000 in cash at now. He can also purchase
the machine by 8 equal yearly installments to be paid at the beginning of each year. If the interest
rate is 12%, what should be amount of each installment?
[Marks: (5+5) = 10]
Q. No. 2.
(a)
Find the equation of the line which passes through the origin O(o,o) and the point of intersection of
the lines 5x +y+4 = 0 and 2x + 3y 1 = 0.
(b)
The total cost y for x units of a certain product consists of fixed cost and the variable cost. It is
known that the total cost is Tk. 1200 for 100 units and Tk. 2700 for 400 units. Assume that y is a
linear function of x.
Required:
(i) Find the linear relationship between x and y.
(ii) Find the slope of the line. What does it indicate?
(iii) Find the cost of producing 200 units of the product.
(iv) If the selling price is Tk. 7 per unit, find the number of units that must be product for breakeven.
[Marks: (4+6) =10]
Q. No. 3.
(a)
A farmer has 2000 yards of fence to enclose a rectangular field. What are the dimensions of the
rectangle that encloses the most area?
(b)
Show that sin (1+tan) + cos (1+ cot) = sec + cosec

[Marks: (5+5) = 10]
Page 7 of 66

FOUNDATION LEVEL
Q. No. 4.
(a) Differentiate the following with respect to x
4x
(i) y = e + log (sin x )
(ii) Log (x cosx)
d2y
(b)
If y = 2x + 4/x ; Prove that
dy
x dx + x dx - y = 0
2
[Marks: (5+5) = 10]
Q. No. 5.
1 of
3 the following Matrix:
3 inverse
(a)
Compute the
2 4 2
1
1 2function
The unit demand
4 is x = (25 2p), where x is the number of units and p is the price.
Let average cost per unit be Tk. 40.3 Find the following:
A=
(b)
(i)
(ii)
(iii)
(iv)
(v)
The Revenue function R in terms of price P.

The cost function C.
The profit function P.
The price per unit that maximizes the profit function. and
The maximum profit.
[Marks: (5+5) = 10]
Q. No. 6.
1
1
x
tan 1 x 2
dx
(a)
Evaluate the following:
(i)
dx ;
(ii)
2
2
1
+
x
taken 3 at a time?
1
+
x
0
0
(b)
How many different words can be formed from the word ARRANGEMENT
[Marks: (5+5) = 10]

Q. No. 7.
2
3 4
bx
(a)
Evaluate the following:
(i)
+ 2 dx
2 e
1
(sin +xcosx ) 2 d .
(ii)
0
(b)
Find the area of the region between the curve
y = F(x) = x (x-1) and the x axis bounded by the
lines x = 0 and x = 1
[Marks: (6+4) = 10]
Page 8 of 66

FOUNDATION LEVEL
PART B : BUSINESS STATISTICS

Q. No. 1.
(a)
What do you mean by measures of central tendency? What are their measures? Among all measures
of central tendency which one is the best and why?
(b)
Pepsi company is forecasting regional sales for next year. The Atlantic branch, with current yearly
sales of $ 194.3 million, is expected to achieve a sales growth of 7.65%; the Midwest branch, with
current sales of $ 79.5 million, is expected to grow by 8.35% and the Pacific branch, with sales of
$ 59.4 million, is expected to increase sales by 9.15%. What is the average rate of sales growth
forecasted for next year?
[Marks: (5+5) = 10]
Q. No. 2.
(a) Define mean deviation, standard deviation and coefficient of variation with some of their uses.
(b)
For the following values calculate mean deviation and coefficient of variation.
17.5 13.3
19.6
23.9
14.7
18.5
22.1
15.7
19.6
17.8
[Marks: (6+4) = 10]
Q. No. 3.
(a) What do you mean by the terms skewness and kurtosis? Point out their role in analyzing a
frequency distribution.
(b)
The following data show the life of some electric bulbs (in hours) of two different companies:
Life of bulbs (in hours)
500-550
550-600
600-650
Philips
50
47
30
Crown
62
34
22
(i) Which companys bulbs have higher average life?
(ii) Which companys bulbs are more uniform/stable in their life?
650-700
18
20
700-750
26
12
[Marks: (5+5) = 10]

Q. No. 4.
(a) Explain with examples the following concepts: (i) Correlation (ii) Regression (iii) Co-efficient of
Determination (iv) Regression Co-efficients.
(b)
Following data relates to the advertisement expenditure and sales of a firm:
Ad. Exp.
29
41
48
53
(Lakh Taka)
Sales (Crores)
7
8
10
12
Required:
(i) Fit regression equation of Ad. Exp. on Sales.
(ii) Estimate sales for Ad. Exp. of Tk. 65.00 lakhs.
(iii) Comment on the reliability of the estimates.
(iv) Compute the 95% confidence interval of the estimate.
58
50
57
13
18
15
[Marks: (4+6) = 10]
Page 9 of 66

FOUNDATION LEVEL
Q. No. 5.
(a)
In a recent study, 80 percent of the homes in the United States were found to have large screen
TVs. In a sample of nine homes, what is the probability that:
(i) All nine homes have large-screen TVs?
(ii) Less than two have large-screen TVs?
(iii) More than two have large-screen TVs?
(b)
A recent study of the hourly wages of maintenance crew members for major airlines showed that
the mean hourly salary was $ 16.50, with a standard deviation of $3.50. If we select a crew member
at random, what is the probability the crew member earns:
(i) Between $ 16.50 and $20.00 per hour?
(ii) At least $ 20.00 per hour?
(iii) At most $15.00 per hour?
[Marks: (5+5) = 10]
Q. No. 6.
(a)
Explain with examples the following concepts: (i) Mutually exclusive events (ii) Sample space (iii)
Classical definition of probability (iv) Subjective probability.
(b)
220 workers employed in a firm in the garment sector of Bangladesh classified according to gender
and skills are presented as follows:
Skilled
Semi Skilled
Unskilled
Total
Gender
S1
S2
S3
Male (M)
38
17
5
60
Female (F)
103
37
20
160
Total
141
54
25
220
If one worker is selected at random compute the followings: (i) Marginal probabilities (ii) Joint
probabilities (iii) Conditional probabilities (iv) Union probabilities.
[Marks: (4+6) = 10]
Q. No. 7.
(a) What is sampling? Discuss the different types of sampling with example.
(b) Distinguish between the followings:
(i) Statistic & Parameter (ii) Null and Alternative hypotheses (iii) Type-I & Type-II errors.
[Marks: (5+5) = 10]
Skill
= THE END =
Page 10 of 66

FOUNDATION LEVEL
SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS
Time: Three hours
Answer FIVE questions, taking at least TWO from each Group A and B.
Full Marks: 100
GROUP-A: BUSINESS ECONOMICS

Q. No. 1.
(a) Explain the following terms under the Theory of Demand and Supply:(i)
Utility and Law of Demand and Supply
(ii) Time and Supply
(iii) Purchasing Power
(iv) Equilibrium Price and Quantity
(b) Explain factors that determine how much Cone Ice-cream a firm will produce?
(c) When and how do Supply and Demand together set the price of a good and the quantity sold?
Explain.
(d) Calculate the equilibrium quantity of the goods when demand and supply functions of a goods are
given as Qd = 19,000 300P and Qs = 17,000 + 100P respectively.
(e) The demand function for Marker pen is estimated as QR = 20,000 2,500PR + 5Y + 100PC
Where QR = Quantity of Marker pen demanded
PR = Price of Marker pen
PC = Price of Competitors product
Y
= Per capita income of the consumer
If the current price of each Marker pen is Tk. 4, the price of the competitors product is Tk. 10 and
per capita income is Tk. 4,000, what will be the income elasticity of demand?
[Marks: (6+4+4+3+3) = 20]
Q. No. 2.
(a) Study of Business Economics and International Business is of tremendous help to Management
Accountants in their professional work. Discuss this statement, giving appropriate examples.
(b) Distinguish between:(i)
Fixed Cost and Variable Cost.
(ii) Marginal Cost and Average Cost.
(c) Corporate Social Responsibility expenditures add up to costs and do not add anything to
revenues. Do you agree? Discuss this statement.
[Marks: (6+6+8) = 20]
Q. No. 3.
(a) Define Price Discrimination and state its required conditions under monopoly.
(b) Compare between Monopoly and Perfect Competition.
(c) Distinguish between Economics of scope and Economics of scale.
(d) When 10 units of output are produced, the average cost of production (AC) is Tk. 30. If average
cost of production (AC) increases to Tk. 40 with an increase in output by one unit, what is the
marginal cost of producing the 11th unit?
(e) The total cost function for Astra Ltd. is given as TC = 500 + 4Q + 2Q2. The firm is a perfectly
competitive firm and is selling the product at Tk. 150 per unit. If the output produced and sold by
the firm is 10 units, what is the profit (loss) earned by the firm?
[Marks: (5+5+4+3+3) = 20]
Page 11 of 66

FOUNDATION LEVEL
SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS
Q. No. 4.
(a) How is equilibrium price determined in the market?
(b) (i) Differentiate between demand pull and cost push inflation.
(ii) Discuss the various measures of credit control taken by the Central Bank to control inflation.
(c) Explain the ways in which public expenditure can play an important role in tackling rural poverty.
[Marks: {5+(4+5)+6} = 20]
Q. No. 5.
(a) Explain Super Profits in firms.
(b) What do you understand by movement along the demand curve? Explain with examples.
(c) Discuss the factors that determine elasticity of demand.
(d) Calculate price elasticity, income elasticity and cross elasticity from the following figures of a firm
selling product X:
Years
Sales in Quantity of Price per unit of X Price per unit of Y Per capita Income
X (No. of units)
in Taka
in Taka
in taka
2000
30,000
30
10
10,000
2010
60,000
20
15
20,000
[Marks: (4+5+4+7) = 20]
GROUP B : INTERNATIONAL BUSINESS
Q. No. 6.
(a) International Trade is vital for a Countrys overall development. Discuss this statement, giving
examples as appropriate.
(b) Bangladesh has not been very successful in attracting FDIs. Explain the reason(s) behind this
situation.
(c) Discuss the determinants of demand for readymade garments of Bangladesh in the world market.
[Marks: (6+7+7) = 20]
Q. No. 7.
Write short notes on any five of the following:
(i)
Anti-dumping.
(ii) GATT.
(iii) Global Network Strategy.
(iv) Technology Transfer.
(v) Product Life Cycle.
(vi) Market Segmentation.
(vii) Balance of Trade and Balance of Payment.
[Marks: (5 x 4) = 20]
Q. No. 8.
(a) Trade must always promote a win-win situation for both parties. Is that a realistic assumption?
Discuss, giving examples as appropriate.
(b) Write short notes on:
(i)
Back to back letter of credit.
(ii) Mode(s) of Export financing in Bangladesh.
(c)
Most developing countries have certain Infant Industry arguments? Discuss these in the context
of the development of Bangladesh. Give examples as relevant.
[Marks: (6+6+8) = 20]
= THE END =
Page 12 of 66

CMA AUGUST-2012 EXAMINATION
PROFESSIONAL LEVEL-I
SUBJECT: 101.INTERMEDIATE FINANCIAL ACCOUNTING.
Time: Three hours
Full Marks: 100




Q. No. 1.
The following trail balance was extracted from the books of Friends International Ltd., a manufacturing
company, as at December 2011.
Taka
Taka
Purchase
2,678,000
Prepayments
2,000
Selling and distribution expenses
175,000
Inventories at 1 January 2011
107,000
Land and buildings at cost
840,000
Plant and machinery at cost
714,000
Accumulated depreciation on buildings at 1 January 2011
166,000
Accumulated depreciation on plant and machinery at 1 January
368,000
Accounts payable
80,000
Warranty provision
19,000
Loan interest
8,000
Mortgage
90,000
Mortgage interest
14,000
Administrative expense
153,000
Accounts receivables
105,000
Other payables
4,000
Retained earnings at 1 January 2011
138,000
General reserve
21,000
Ordinary share capital of Tk. 10 each
382,000
Bank loan
58,000
Interest income
5,000
Share premium account
199,000
Bank deposit
4,000
Bank current account
20,000
Revenue
3,290,000
4,820,000
4,820,000
You also obtain the following information.
(i) Depreciation is to be provided on the straight-line method on buildings at 2% per annum and on
plant and machinery at 20% per annum. The cost of the buildings at 31 December was Tk. 650,000.
(ii) Inventories at 31 December 2011 comprised raw materials Tk. 113,000, work in process Tk. 12,000
and finished goods Tk. 54,000.
(iii) The original mortgage of Tk. 225,000 was taken out on 1 January 2002 for a term of 15 years,
repayable in equal monthly installments on the 25th day of each month.
(iv) The bank loan was granted on 1 September 2008 for a fixed term of ten years.
Page 13 of 66
CMA AUGUST -2012 EXAMINATION

Q. No. 1. (Contd)
(v) Provision is to be made for income tax @ 37.5%, based on the results of the year.
(vi) A transfer of Tk. 21,000 was made to the general reserve during the year.
Required:
Prepare Friends International Ltd.s Statement of Comprehensive Income for the year ended 31 December
2011 and Statement of Financial Position at that date in accordance with the requirements of BAS 1.
[Marks: 20]
Q. No. 2
(a) You are a partly qualified CMA and working as a Deputy Credit Controller of a Company
named Monyem Limited. The management wants a total Debtors Account from the following
data:
Transactions for the month of June-2012
Amount (Tk.)
i
Sales (includes cash sales of Tk. 7,000)
68,000
ii
Collections from debtors (cash)
57,000
iii
Return inward
700
iv
Discount allowed
2,000
v
Bad debts written off
1,500
vi
Cheques received
10,000
vii
Cheques dishonored
2,000
viii Bad debts written off now recovered
500
ix
Provision for doubtful debts
1,200
x
Balance outstanding on 31.05.2012 (Receivables)
20,000
(b)
Required: Prepare a Debtors Account for the month of June-2012.

The following information relates to the debt securities investments of KK & Co.
(i) On February 1, the company purchased 12% bonds of PQS & Co. having a par value of
Tk. 500,000 at 100 plus accrued interest. Interest is payable on April 1 and October 1.
(ii) On April 1, semiannual interest is received.
(iii) On July 1, 9% bonds of XYZ & Co. were purchased. These bonds with a par value of
Tk. 200,000 were purchased at 100 plus accrued interest. Interest dates are June 1 and
December 1.
(iv) On September 1, bonds with a par value of Tk. 100,000, purchased on February 1, are sold at
99 plus accrued interest.
(v) On October 1, semiannual interest is received.
(vi) On December 1, semiannual interest is received.
(vii) On December 31, the fair value of the bonds purchased February 1 and July 1 are 95 and 95,
respectively
Required:
(1) Prepare all journal entries you consider necessary, including year-end entries (December 31)
assuming these are available-for-sale securities.
(2) If KK & Co. classified these as held-to-maturity securities, explain how the journal entries
would differ from those in part(1).
[Marks: 7 + 13 = 20]
Page 14 of 66

Q. No. 3.
(a)
As per Para 6 of IAS-2, inventories include assets held for sale in the ordinary course of business
(finished goods), assets in the production process for sale in the ordinary course of business (work
in process), and materials and supplies that are consumed in production (raw materials). In the Para
16 and 18 of IAS-2 where mentioned that inventory cost should not include few items.
Can you write the name of the items?
(b)
Pathan Furniture Ltd. is a retailer of Italian furniture and has five major products: Sofas, Dining
Tables, Beds, Office Tables and Chairs. At June 30, 2012, quantity on hand, cost per unit, and net
realizable value (NRV) per unit of the product lines are as follows:
Products
Dining
Tables
Page 15 of 66
Beds
Office
Tables
Chairs
Descriptions
Quantity on hand
100
200
300
400
500
Cost per unit
Tk. 1,00,000
Tk. 50,000
Tk. 1,50,000
Tk. 75,000 Tk. 25,000
NRV per unit
Tk. 1,02,000
Tk. 45,000
Tk. 1,60,00
Tk. 77,000 Tk. 20,000
Required:
Compute the valuation of the inventory of Pathan Furniture Ltd. at June 30, 2012, under IAS-2
using the Lower of Cost and NRV principle.
(c) On 1st April, 2011, Farhana has 50,000 ordinary shares of M3 Ltd. at a book value of Tk.15 per
share (face value Tk.10 each). She provides you the further information:
(1) On 20th June, 2011, she purchased another 10,000 shares of M3 Ltd. at Tk.16 per share.
(2) On 1st August, 2011, M3 Ltd. issued one equity bonus share for every 6 shares held by the
shareholders.
(3) On 31st October, 2011, the directors of M3 Ltd. announced a right issue which entitle the
holders to subscribe 3 shares for every 7 shares at Tk.15 per share. Shareholders can transfer
their rights in full or in part.
Farhana sold 1/3rd of entitlement to Yeasmine for a consideration of Tk.2 per share and subscribe
the rest on 5th November, 2011.
Required:
Prepare Investment A/c in the books of Farhana for the year ending 31st March, 2012 (accounting
year April March).
[Marks: 4 + 7 +9 = 20]
Q. No. 4.
(a) An accountant must be familiar with the concepts involved in determining earnings of a business
entity. The amount of earnings reported for a business entity is depended on the proper recognition,
in general, of revenue and expenses for a given time period. In some situations, costs are recognized
as expenses at the time of product sale. In other situations, guidelines have been developed for
recognizing costs as expenses or losses by other criteria.
Required:
(i) Explain the rationale for recognizing costs as expenses at the time of product sale.
(ii) What is the rationale underlying the appropriateness of treating costs as expenses of a period
instead of assigning the costs to an asset? Explain.
(iii) Identify the conditions under which it would be appropriate to treat a cost as a loss.
Sofas

Q. No. 4. (Contd)
(b)
In April 2012 your client, Dilara Pharmaceuticals Ltd. a private company, decided to undertake a
major restructuring of its manufacturing activities. The client had two factories in different towns
that produce the same products. Management decided that production would be moved to one of the
factories (Z). Management has also decided to incur additional costs to upgrade the facilities in
order to increase production significantly. The remaining factory (X) was closed. The company has
incurred the following costs:
(i)
Cost of closing factory X, including the cost of terminating some
Tk. 1,000,000
existing contracts and redundancy payments for staff
(ii)
Cost of feasibility study carried out by the Company to determine the
Tk. 90,000
best system for factory Z
(iii)
Cost of relocating key staff to the town where factory Z is located.
Tk. 50,000
The staff are not contracted to remain with the company.
(iv)
Cost of implementing the new system in factory Z:
(a) Consulting fees
Tk. 550,000
(b) Allocation of time spent by internal employees
Tk. 150,000
(c) training for new staff
Tk. 40,000
(v)
Efficiency losses in early production stages
Tk. 30,000
(vi)
Campaign specifically to advertise the new technology being used
Tk. 20,000
Required:
How should each of the above costs be accounted for: capitalized or expensed? Support your
answer with reference of relevant accounting standards (if any).
[Marks: (12+8) = 20]
Q. No. 5.
General Motors Ltd. has prepared the balance sheets as set out below:
Balance sheets as at 31 March
20111
(Tk. 000))
ASSETS
None-current assets
Property, plant and equipment
Investments
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Page 16 of 66
2010
(Tk.) 000)
30,946
7,100
38,046
25,141
25,141
16,487
12,347
863
29,697
67,743
15,892
8,104
724
24720
49,861

SUBJECT: 101.INTERMEDIATE FINANCIAL
ACCOUNTING.
Q. No. 5. (Contd)
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital (Tk. 1 per ordinary
share)
Share premium
Revaluation reserve
Retained earnings
Non-current liabilities
Current liabilities
Trade payables
Accruals
Tax liability
Total equity and liabilities
13,000
10,000
12,500
7,450
24,776
57,726
3,250
5,000
2,650
22,856
40,506
4,250
2,771
1,200
2,796
6,767
67,743
2,632
1,235
1,238
5,105
49,861
The following notes are relevant:

(i)
Profit before tax was Tk. 5,404,000 for the year ended 31 March 2011.
(ii) Provision for tax was Tk. 2,634,000 for the year ended 31 March 2011. Taxation provided at 31
March 2010 was settled at a figure lower than the amount provided.
(iii) Analysis of property, plant and equipment
2011(Tk. 000)
2010 (Tk. 000)
Freehold buildings
25,100
19,780
Fixtures and fittings
5,846
5,361
30,946
25,141
(iv) Depreciation has not been provided on freehold buildings. During the year a professional
revaluation of buildings taking account of additions during the year has been incorporated into the
books of account. There were no disposals during the year.
(v) Additions to fixtures and fittings during the year totaled Tk. 1,365,000 at cost. There were no
disposals.
(vi) During the year the company made a right issue of shares on the basis of three new shares for every
ten shares held at a price of Tk. 3.5 per share. Pending the purchase of new plant part of the
proceeds of the issue has been invested in shares in other listed companies.
Required:
From the above information, prepare a cash flow statement using the indirect method in accordance
with BAS 7 Cash Flow Statements for the year ended 31 March 2011.
[Marks: 20]
= THE END =
Page 17 of 66

SUBJECT: 102.COST ACCOUNTING.
Time: Three hours
Full Marks: 100




Q. NO. 1.
(a) Traditional costing charges high volume product high Do you believe the statement? Why or
why not?
(b) Jonson Company manufactures two products, Product A and Product B those varies significantly in
terms of resource consumption. Unit costs for materials and labor are:
Product A
Product B
Direct Material
Tk. 8
Tk. 10
Direct Labor
4
6
One unit of Product A requires two machine hours, Product B requires three machine hours for
completion. The company has only fixed machine hours and runs at capacity.
Estimated indirect manufacturing costs (factory overhead) are Tk. 825,000 to produce 22,000 units
of Product A and 60,000 units of Product B.
Required:
a.
Compute the predetermined overhead application rate.
b.
What is the cost to manufacture one unit of each product under traditional costing?
c.
There are some complains from the customers regarding product cots. Tom Harrison, the
President, feels that there may be product cost cross-subsidization. He called upon Miss
Kelly, the cost accountant recently joined the team, and asked her to apply ABC with the
following information:
Activity
Traceable Costs Total Activity
Product A
Product B
Machine Setups
Tk. 450,000
4,200
1,200
3,000
Purchase Orders
220,000
400
290
110
Material Receipts
155,000
10,300
3,000
7,300
i.
Compute activity rates.
ii.
Compute overhead cost per unit of Product A and B.
iii. Compute total cost per unit of Product A and B under ABC.
iv. Do you believe that the President was right? Justify your answer.
[Marks: {5+(5+5+5)} = 20]
Q. No. 2.
(a) There are 5 Rs in material Management. What these 5Rs stand for? No elaboration is required.
(b) A company requires 48,000 components per year which will be used as a constant rate. Carrying
costs are Tk. 6.00 per unit.
Per annum the cost per reorder Tk.1000 irrespective of order size. Purchased orders are placed on
the assumption that delivery will be received when stock component falls to zero.
Required:
i.
Calculate the cost per annum of pursuing purchase order policies where the order size may be
from 2000 to 6000 components in multiplies of 1000 components and hence state the
purchase order quantity which will minimize cost.
ii.
Use the economic order quantity formula to calculate the purchase order quantity that will
minimize cost.
Page 18 of 66

Q. No. 2.(Contd.)
iii. Use the economic order quantity formula to calculate the EOQ where annual demand has
risen to 96,000 components.
(c) ABC company has obtained the following costs and other data pertaining to one of its materials:
Working days per year
250
Normal use per day
500 units
Maximum use per day
600 units
Minimum use per day
100 units
Lead time
5 days
Variable cost of placing one order
Tk. 36
Variable carrying cost per unit per year
Tk. 4
Required: compute the following:
1.
Economic order quantity.
2.
Safety stock (maximum)
3.
Order point
4.
Normal maximum inventory
5.
Absolute maximum inventory
[Marks: {3+( 3+2+2) +10) = 20]
Q. No. 3.
Mr. Sajeeb is a student of management accounting, recently joined in Complete Clothes Care (CCC) a
RMG company and usually produce western branded clothes. The company follows integrated accounting
system. Due to several macro environmental factors like world economic meltdown, adverse weather for
cotton plantation, interest rate hike and high inflation in operating country, every firm of RMG industry
facing tough competition firstly from world competitors then from domestic competitors. In this
circumstance, to retain effective rate of return management of CCC has decided to ensure efficient,
effective and economic use of resources at all sphere of activities through practice of management
accounting techniques. Management apprehending that in coming summer North American countries will
procure good number of budgeted casual summer wear and lowest CM and desired quality will be a key
factor for awarding orders.
Considering above scenario CFO of CCC asked Mr. Sajeeb to collect historical and prospective
information in both type i.e. quantitative and qualitative regarding casual summer cloths and submit
report to the management.
Mr. Sajeeb found that in the year 2011 the company supplied three types of branded casual summer cloths
and relevant information regarding three jobs as follows:
Particulars
Job # 501_2011
Job # 502_2011
Job # 503_2011
Type
Gents wear
Women wear
Kids wear
Quantity (Pcs)
1,00,000
1,50,000
2,50,000
Labor hour rquired per pcs
0.50
0.75
1
Machine hour required per pcs
0.50
0.50
0.25
CM per pcs revenue (BDT)
170
250
275
Cost of fabrics per pcs (BDT)
70
75
50
Cost of accessories per pcs (BDT)
10
20
25
Cost of Special fabrics per pcs (BDT)
10
15
Labor cost per hour (BDT)
100
100
100
Page 19 of 66

Q. No. 3.(Contd.)

Factory overhead total BDT 12,50,000 and 60% of which varied with the machine hour and
remaining 40% is capacity related cost.

Administrative staffs salary BDT 100,000.

The company spends BDT 50,000 for CSR activities.

Due to critical design 5% of women wear and 10% of kids wear rejected and billing money were
not received and it is revealed that with a proper skilled labor such quality issues can be solved
which will increase labor cost for women wear by 10% and for kids wear by 20%.

In connection with above job the company purchased a wrong machine costing BDT 10,000. The
machine has no resale value and do not wear out through use.

Instead of running the factory, the company could rent its factory space for BDT 50,000.

As per tradition in the year 2011 the company produced only branded items and operated at 70%
capacity. It had an option to carry non-branded item but it did not carry non-branded order.
Required:
(a) Mention prerequisite for job order costing.
(b) Prepare a cost sheet for all jobs and for overall company.
(c) Calculate marginal cost for the order to be placed for each category of job in the year 2012.
Assuming that all materials cost and labor cost will increase by 5% & 10% respectively and skilled
labor will engage for women wear and kids wear.
(d) With compare to branded item, non-branded items material cost 20% lesser, labor cost 30% lesser.
After meeting the branded item order, if the company has spare capacity, suggest how much
minimum per pcs CM is required to carry non-branded item order in the year 2012?
[Marks: (2+10+5+3) = 20]
Q. No. 4.
Zenith Pharmaceuticals of Congo produces a unique syrup using cane sugar and local herbs. The syrup
is sold in small bottles and is praised as a flavoring for drinks and for use in desserts. The bottles are sold
for Tk. 25 each. The first stage in the production process is carried out in the Mixing Department, which
removes foreign matter from the raw materials and mixes them in the proper proportions in large vats.
The company uses the weighted average method in its process costing system. Materials in the
department needs to be introduced in several stages, 30% of the total materials are introduced when
production has been started, 50% of the total materials are introduced when production has been
completed by 50% and the rest 20% of the total material should be introduced at 90% process level.
Labor will be paid when work has been done by 30% and overhead costs are incurred uniformly
throughout the process. The company uses weighted average method of costing.
The following activity was recorded in the Mixing Department during July:
Units
DM
DL
MOH
Work in Process 7/1/10 (25% completed)
20,000
Tk. 12,500
-- Tk. 15,500
Units started in production
110,000
Costs for July
Tk. 250,000
Tk. 247,000 Tk.344,500
Work in Process 7/31/00 (60% completed)
25,000
Required: Prepare a production report for the Mixing Department for the month.
[Marks: 20]
Page 20 of 66

Q. No. 5.
(a) What do you mean by Labor Turnover? From the following data provided to you find out the labor
turnover rate by applying:
(i) Separation rate method;
(ii) Net labor T.O rate (or) Replacement method;
(iii) Flux rate method
No. of workers on the payrollAt the beginning of the month
900
At the end of the month
1,100
During the month, 10 workers left, 40 persons were discharged and 150 workers were recruited. Of
there, 25 workers were recruited in the vacancies of those leaving, while the rest were engaged for
an expansion scheme.
(b) Particulars for a worker X are given below:Hourly rate
= Tk. 10/Agreed rate of production
= 100 units per hour
Hours worked
= 8 hours
Units produced
= 1200
Required: Total earnings for the day under Rowan plan.
(c) A companys new process will be carried out in one department. The production process has an
expected learning curve of 80%. The cost subject to the learning effect for the first batch produced
by the process was Tk. 20,000.
Required: Compute the cumulative average cost per batch subject to the learning effect after the
16th batch has been produced.
Marks: (7+7+6) = 20]
= THE END =
Page 21 of 66

SUBJECT: 103. MANAGEMENT AND MARKETING MANAGEMENT
Time: Three hours

Answer any THREE questions from each part.


Full marks: 100
PART A : MANAGEMENT (TOTAL MARKS-50) *

Q. No. 1.
(a) What are the four basic activities that comprise the management process? How they are related
to one another?
(b) Define efficiency and effectiveness in Management with examples.
(c) Identify and discuss contemporary management issues and challenges.
[Marks: (6+4+6) = 16]
Q. No. 2.
(a) Differentiate between diversity and multiculturalism in organizations.
(b) Briefly describe the effects of diversity and multiculturalism in organizations.
[Marks: (6+10) = 16]
Q. No. 3.
(a) Discuss the concepts of operational, financial and strategic control.
(b) How can we ensure control over quality, cost and productivity.
[Marks: (8+8) = 16]
Q. No. 4.
(a) Identify and describe how the environment affects organizations and how organizations response
to their environment.
(b) Discuss the determinants of an organizations culture and how the culture can be changed and
managed?
(c) What are the characteristics of multicultural organization?
[Marks: (6+4+6) = 16]
Q. No. 5.
Write short notes on the following:
(a) Corporate Social Responsibility;
(b) TQM;
(c) Leadership;
(d) Committee.
[Marks: (4 x 4) = 16]
* Two marks are reserved for neatness and relevance.
Page 22 of 66

SUBJECT: 103. MANAGEMENT AND MARKETING MANAGEMENT
PART B : MARKETING MANAGEMENT (TOTAL MARKS-50) *
Q. No. 6.
(a) Define Market, Marketer, Prospect and Marketing.
(b) What is Holistic Marketing concept? Draw a schematic overview of four broad components
characterizing Holistic Marketing.
(c) As a Cost Management expert why do you need to understand marketing?
[Marks: (4+8+4) = 16]
Q. No. 7.
(a) Describe the stages of the product life cycle.
(b) How marketing strategies change during the product life cycle.
[Marks: (8+8) = 16]
Q. No. 8.
(a) What is a brand? When spending money on brands becomes profitable?
(b) How we can brand Bangladesh?
(c) How we can brand CMA profession?
[Marks: (6+5+5) = 16]
Q. No. 9.
(a) Describe the importance of marketing channels in the value delivery process.
(b) What are the factors you should consider for developing a strong marketing channel?
(c) Compare between trade promotion and consumer promotion.
[Marks: (6+6+4) = 16]
Q. No. 10.
(a) What is strategic marketing planning?
(b) Explain the Boston Consulting Group (BCG) Matrix. When we should use this matrix?
[Marks: (6+10) = 16]
* Two marks are reserved for neatness and relevance.
= THE END =
Page 23 of 66

SUBJECT: 104. INFORMATION TECHNOLOGY
Time: 2 hours 30 minutes
Full Marks: 80

Answer any four of the following questions.

Q. No. 1.
a)
Define Information Systems. Describe the key components of Information Systems.
b)
What is MIS? "Only a computerized MIS can cope up with the dynamics of changing management
requirements"-Explain.
c)
Discuss points that are important while designing an MIS for a business organization.
d)
What are the differences between MIS and DSS?
[Marks: (4X5) = 20]
Q. No. 2.
(a) In keeping the organizational information in a file processing system, what are the major
disadvantages and how database management systems can reduce the aforesaid problems?
(b) Explain with example the difference between the following terms with reference to a Database:
*
Data and Information
*
Field and Record
(c) What do you understand by the term memory? What is a primary memory? What are the
distinguishing characteristics of a primary memory?
(d) Distinguish between a batch processing system and an online processing system.
[Marks: (4X5) = 20]
Q. No. 3.
(a)
What are the differences between system software and application software package? Mention two
examples each.
(b) Discuss input and output devices with some examples each.
(c) What is Data Flow Diagram (DFD)? Describe the rules of constructing a DFD with figure?
[Marks: (7+6+7) = 20]
Q. No. 4.
(a) Compare and contrast Internet, Intranet and Extranet.
(b) What does the e' stand for in e-commerce? How do you differentiate between commerce' and
e-commerce'?
(c) What do you mean by security control? Why it is needed in an Organization?
(d) What do you understand by the life cycle of a system? "Designing is considered the most important
stage in SDLC. Do you agree with this statement?
[Marks: (4X5) = 20]
Q. No. 5.
(a) Discuss about prevention of computer related waste and mistakes.
(b) What is security? How to develop a disaster recovery plan?
(c) Define computer crimes. Critically explain the procedures of auditing information systems to
control computer crimes.
[Marks: (4+6+10) = 20]
Q. No. 6.
Write short notes on:
(a) Outsourcing; (b) Artificial Intelligence; (c) Knowledge Management; (d) Compiler and Interpreter;
(e) Database Administrator
[Marks: (5X4) = 20]
=THE END=
Page 24 of 66

PROFESSIONAL LEVEL-II
SUBJECT: 201.ADVANCED FINANCIAL ACCOUNTING-I.
Time: Three hours
Full Marks: 100




Q. No. 1.
(a) The substance rather than the legal form of the lease contract is indicative of the classification of
lease as finance or operating. Do you agree? Why?
(b) SMX Leasing Company agrees to lease machinery to PMX Corporation on January 1, 2010. The
following information relates to the lease agreement.
1.
The term of the lease is 7 years with no renewal option, and the machinery has an estimated
economic life of 9 years.
2.
The cost of the machinery is Tk.420,000, and the fair value of the asset on January 1, 2010, is
Tk.560,000.
3.
At the end of the lease term the asset reverts to the lessor. At the end to the lease term the
asset is expected to have a guaranteed residual value of Tk.80,000. PMX depreciates all of its
equipment on a straight-line basis.
4.
The lease agreement requires equal annual rental payments, beginning on January 1, 2010.
5.
The collectability of the lease payments is reasonably predictable, and there are no important
uncertainties surrounding the amounts of costs yet to be incurred by the lessor.
6.
SMX desires a 10% rate of return on its investments. PMXs incremental borrowing rate is
11%.
Present value of Tk.1 at 10% for 7 years is 0.51316 and 11% for 7 years is 0.48166
Present value of an annuity due at 10% for 7 years is 5.35526 and 11% for 7years is
5.23054.
Instructions:
(a) Discuss the nature of this lease for both the lessee and the lessor, according to IAS-17 Leases.
(b) Calculate the amount of the annual rental payment required.
(c) Compute the present value of the minimum lease payments.
(d) Prepare the journal entries PMX would make in 2010 and 2011 related to the lease arrangement.
[Marks: {5+(4+3+3+5)} = 20]
Q. No. 2.
(a) How can you classify an asset as a current asset or non-current? Briefly describe as per IAS-1.
Page 25 of 66

Q. No. 2.(Contd.)
(b)
The R & Co. had the following balance sheet on April 30, 2012 at which the company is
contemplating filing a petition for liquidation.
Assets
Cash
Notes Receivables
Accounts Receivables (Net)
Inventories
Finished goods
Work in Process
Raw materials
Prepaid Insurance
Investment in Grameen Phone
Land
Buildings (Net)
Machinery & Equipments(net)
Total Assets
R & Company
Balance sheet
April 30, 2012
Taka
Liabilities & stock holders equity
8,200 Bank Notes Payable
24,000 Accounts Payables
47,000 Accrued Salaries & Wages
Accrued Interest
56,000
On Bank Notes
24,000
On Mortgage
39,000
Mortgage Note Payables
1,200 Capital Stock
26,500 Retained Earnings (deficit)
42,000
1,98,000
93,000
5,58,900
Total Liabilities & stock holders equity
Taka
32,000
1,95,000
13,500
1,100
8,500
2,00,000
2,50,000
(1,41,200)
5,58,900
Additional Information:
1.
The notes receivable are expected to be fully realized and they have been pledged as collateral on
Bangladesh Development Bank note in the principal amount of BDT. 20,000.00 plus accrued
interest of BDT. 600.00
2.
Accounts receivable have been an estimated collectible value of BDT. 28,000.00
3.
Finished goods inventory can be sold at a markup of 20% over cost, with selling expenses estimated
at 10% of selling price. Work in process has no value unless finished. The estimated cost to
complete totals BDT. 12,000.00, of which 5,000.00 represent the cost of Raw Materials. The
estimated selling price of the work in process inventory when finished is 25,000.00. The remaining
raw materials inventory has an estimated selling price 70% of its cost.
4.
The recovery value of prepaid Insurance is 6,00.00
5.
The Grameen phone stock is pledged as collateral on a Bank note payable in the principal amount
of 12,000.00 plus accrued interest of 500.00.
6.
Land & Building have appraised values of BDT. 40,000.00 and BDT. 1,00,000.00 respectively, and
serve as collateral on the mortgage note payable.
7.
The machinery and equipments have an estimated disposal value of 38,000.00
Prepare the statement of affairs for R & Company along with a Deficiency Account summarizing
estimated gains & losses on the realization of assets.
[Marks: (5+15) = 20]
Page 26 of 66

Q. No.3.
(a) What is the nature of a sale on consignment? When is revenue recognized from a consignment sale?
(b) OMX Inc. started a four-year contract to build a dam. Activities commenced on February 1, 2010.
The total contract price amounted to Tk.12,000,000, and it was estimated that the work would be
completed at a total cost of Tk.9,500,000. In the construction agreement the customer agreed to
accept increases in wage tariffs additional to the contract price.
The following information refers to contract activities for the financial year ending December 31,
2010:
1. Costs for the year:
Items
Taka
Material
1,400,000
Labor
800,000
Operating overhead
150,000
Subcontractors
180,000
2.
Current estimate of total contract costs indicates the following:
Materials will be Tk.180,000 higher than expected.
Total labor costs will be Tk.300,000 higher than expected. Of this amount, only Tk.240,000
will be the result of increased wage tariffs. The remainder will be caused by inefficiencies.
A savings of Tk.30,000 is expected on operating overhead.

3.
During the current financial year the customer requested a variation to the original contract,
and it was agreed that the contract price would be increased by Tk.900,000. The total
estimated cost of this extra work is Tk.750,000.
4.
By the end of 2010, certificates issued by quantity surveyors indicated a 25% stage of
completion.
Required: Determine the profit to date, based on:
Option 1- contract costs in proportion to estimated contract costs.
Option2- Percentage of the work certified

[Marks: (5+15) = 20]
Q .No.4.
(a) What do you mean by Impairment of reinsurance assets as per IFRS 4.
(b) The account balance in the general fund of the Dhaka City Corporation - South on June 30, 2012
are as follows:
Taka ('000)
Cash in Hand ............................................................................................................... 500
Bank balances:
Sonali bank STD ....................................................................................................... 60,000
Janata Bank STD ...................................................................................................... 50,000
Agrani Bank Current A/C ........................................................................................ 25,000
Dutch Bangla Bank Current A/c .............................................................................. 35,500
Page 27 of 66

Q. No. 4.(Contd.)
FDR at BKB ......................................................................................................... 1,00,000
Holding Tax Receivable........................................................................................ 1,89,500
Notes Payable........................................................................................................ 33,500
Wages Payable.....................................................................................................
21,500
Reserve for Encumbrances...............................................................................
9,400
Estimated Revenues....................................................................................
28,12,000
Revenues ......................................................................................................
28,30,100
Appropriations ........................................................................................... ..
27,90,000
Expenditures...................................................................................................
27,94,600
Encumbrances ................................................................................................
9,400
The balances of the Revenue ledger are as follows:
Drs.
Taka ('000)
Holding Taxes ........................................................................ 21,50,000
City Corporation Taxes ......................................................... 5,10,000
Motor Vehicles Licenses ......................................................
95,000
Interest on bank Accounts ....................................................
22,000
Miscellaneous ......................................................................
35,000
Data from the expenditure ledgers are as follows:
General Government ....................................................
Police department ..........................................................
Fire Department ............................................................
Streets & Roads ............................................................
Sanitation .....................................................................
Public Welfare ............................................................
Crs.
Taka ('000)
21,67,000
5,01,500
97,000
23,100
41,500
Expenditure Budget Appropriation

Taka ('000)
Taka ('000)
9,36,400
5,50,000
4,28,900
4,15,000
2,94,300
1,70,000
9,25,000
5,55,000
4,40,000
4,00,000
2,95,000
1,75,000
The Encumbrances balances in the expenditure ledger are as follows: Taka ('000)
General government..................................................
3,600
Fire Department
....................................................
2,100
Sanitation....................................................................
3,700
Required:
i)
Prepare a statement of Revenues and Expenditures - Budget & Actual
ii)
Prepare a Statement of Changes in Fund Balance assuming the balance of fund at the
beginning of the year was Tk. 37,00,00,000
iii) Prepare a Balance Sheet.
[Marks: (5+15) = 20]
Page 28 of 66

Q .No.5.
(a) What do you mean by changes in accounting estimates as per IFRS?
(b) Multi Ltd commenced trading three years ago, on 1 January 20X5. Its draft balance sheet at 31
December 20X7 and its final balance sheets for the two previous years are as follows:
20X7
20X6
20X5
CUm
CUm
CUm
Non-current assets
Property, plant and equipment
231
230
180
Other Assets
169
120
120
400
350
300
Current assets
800
800
800
Total Assets
1200
1200
1200
Capital
100
100
100
Reserves
450
400
350
550
500
450
200
200
200
Current liabilities
450
450
450
Total Liabilities
1200
1150
1100
Additional information is available as follows:

1.
The profit for each of the three years was CU 50m.
2.
The movements on property, plant and equipment were as follows:
20X7
CUm
230
80
10
320
(89)
231
Brought forward
Direct cost of additions
Interest capitalized
Depreciation
Carried forward
3.
20X6
CUm
180
90
10
280
(50)
230
20X5
CUm
0
180
20
200
(20)
180
Property, plant and equipment is depreciated at the rate of 10% of cost per annum.
The directors now believe that more relevant information would be provided if interest was not
capitalized, so the decision has been made to change the accounting policy and to recognize all interest as
an expense in the year in which it is incurred.
Prepare the revised balance sheets at 31 December 20X7 and 20X6, together with extracts from the
statement of changes in equity for each of the two years then ended.
[Marks: (5+15) = 20]
= THE END =
Page 29 of 66

SUBJECT: 202.MANAGEMENT ACCOUNTING
Time: Three hours
Full Marks: 100




Q. No. 1.
SG Company is a long-established food manufacturer which produces semi-processed foods for fast-food
outlets. While for a number of years it has recognized the need to produce good quality products for its
customers, it does not have a formalized quality management program.
A director of the company has recently returned from a conference, where one of the speakers introduced
the concept of Total Quality Management (TQM) and the need to recognize and classify quality costs.
Required:
(a) Explain what is meant by TQM and use examples to show how it may be introduced into different
areas of SG Companys food production business.
(b) Explain why the adoption of TQM is particularly important within a JIT production environment.
(c) What roles do management accountants play in TQM?
(d) Explain four quality cost classifications, using examples relevant to the businesses of SG Company.
[Marks: (5+5+4+6) = 20]
Q. No. 2.
Laws Stores Ltd. owns a large out-of-town store selling sports equipment. For reporting and control
purposes it splits the business into four product groups: Ball sports, Racquet sports, Water sports and
Outdoor activities.
The board of directors is dominated by the Laws family who has heard a rumor that one of the large
quoted sports goods retailers is seeking planning permission to build a new store nearby. The board of
Laws Stores Ltd. feels that to compete they may have to decrease the prices of their products.
For the forthcoming year, before any price changes and implemented, budgeted information is as follows:
Ball sports
Racquet sports
Water sports
Outdoor activities.
(Tk.)
(Tk.)
(Tk.)
(Tk.)
Sales
800,000
400,000
250,000
150,000
Variable costs
500,000
260,000
190,000
126,000
Fixed costs of operating the store are budgeted to be Tk. 400,000.
Price decreases are being contemplated as follows:
Average price decrease (%)
Ball sports
10
Racquet sports
5
Water sports
6
Outdoor activities
4
Although these price decreases are expected to be needed to defend sales volume from the threat posed by
new competition, the directors believe that sales volume for Water sports and Outdoor activities might
even increase as a result of the lower prices being proposed.
In fact, the sales volume changes as a result of the decrease in prices are expected to be as follows:
Ball sports
Unchanged if prices are decreased by 10%
Racquet sports
Unchanged if prices are decreased by 5%
Water sports
Increase of 15% if prices are decreased by 6%
Outdoor activities Increase of 10% if prices are decreased by 4%
Page 30 of 66

Q. No. 2.(Contd.)
Required:
(i) Calculate the C/S ratio and breakeven sales revenue for the store before any changes to product
selling prices.
(ii) Calculate the effect upon profit of the proposed price changes and suggest whether they should be
implemented.
(iii) Discuss the other factors that should be considered before implementing the proposed changes to
product prices.
[Marks: (6+8+6) = 20]
Q. No. 3.
(a) Rightlight Ltd. is an advertising company and has been asked to tender for a contract to increase
public awareness of global environmental issues as part of the governments commitment to
improving the countrys eco-footprint. Rightlight Ltd. believes that the campaign work will take a
period of six months.
Five advertising specialists would need to be recruited on an annual salary of Tk. 45,000. A project
manager would be needed to coordinate the campaign. An existing project manager would be used
whose annual salary is currently Tk. 55,000. He would be expected to devote 30% of his time on
the new contract.
The new employees would have to go through an Environmental Awareness training program in
order to get approval to work on government contracts. This would cost Tk. 3,000 per employee,
but it is anticipated that a grant of 20% towards this cost will be available.
Alternatively, Rightlight Ltd. could subcontract the work (with the governments agreement) to
another company that it sometimes uses for joint venture projects. It is anticipated that the
subcontract firm would demand a fee of Tk. 135,000 to undertake the work.
Required:
(i) What is relevant cost? Are variable costs always relevant costs? Explain.
(ii) What would be the relevant cost of labor for this contract?
(b) Right-Tyres Ltd. has three depots selling car tyres. The depots are based in N, L and M cities. The
average selling price per tyre is Tk. 25.
Budgets have been produced for the forthcoming period as follows (Tk.):
N
L
M
Sales
2,000,000
1,500,000
2,500,000
Costs:
Purchase price of tyres
1,200,000
900,000
See below
Wages and salaries
250,000
220,000
358,000
Overheads
450,000
430,000
600,000
Total cost
1,900,000
1,550,000
See below
The average purchase price per tyre charged by suppliers is the same for both the N and L depots.
However, due to higher volume of tyres purchased by the M depot, the M depot benefits from a
20% discount compared to the price charged to the N and L depots.
The management of Right-Tyres Ltd. believes that some of the overheads included in the above
budgets would not be incurred if the decision was taken to close any of the depots.
Page 31 of 66

Q. No. 3.(Contd.)
At a recent board meeting, doubt was cast over the future of the L depot given its budgeted loss of
Tk. 50,000.
The percentages of overheads which are variable costs and would not be incurred if a depot were to
be closed differs with each depot and are as follows:
Depot
%
N
25
L
15
M
20
If a depot were to be closed it is not expected that there would be any major consequences upon the
sales volumes achieved at the remaining depots due to the geographical distances between the
depots.
Required:
(i) Discuss whether the L depot should be closed purely on the basis of financial considerations.
(ii) Assuming that 80% of wages and salaries at each depot are variable costs, calculate the
number of tyres that must be sold by the whole company in order to break-even. (For this
requirement, assume that the L depot will be kept open and that sales will be made at the
depots in the ratio used in the original budget.)
(iii) Discuss the key non-financial factors that should be considered when making a decision to
close part of a business such as the L depot.
[Marks: (4+4+2+6+4) = 20]
Q. No. 4.
(a) Eastern University is considering adding 100 more undergraduate students, 25 in each entering
class for the next four years. The University Vice Chancellor argues that since there is excess
capacity in existing classes, no additional faculty will be hired. Thus the teaching cost of these 100
additional students is zero. Comment on the statement made by University Vice Chancellor.
(b) Staly Company has two wholly owned Bangladesh-based subsidiaries. One of these subsidiaries, B
Ltd. manufactures plastic toys which it sells to toy retailers. B Ltd. is about to launch a new product
but is unsure what price to charge. A firm of consultants has estimated the level of demand at
several different prices. This information is as follows:
Price (Tk.)
5
10
15
20
25
30
35
40
Level of demand (000 of units) 200 180
160
135
120
100
75
50
The cost of manufacturing the new toy has been estimated as follows:
Particulars of cost
Taka per unit
Direct Materials
2.00
Direct Labor
1.50
Variable overheads
2.50
Fixed costs associated with manufacturing the new toy are expected to be Tk. 400,000 per annum.
However, if production and sales exceed 150,000 units fixed costs are expected to increase by Tk.
50,000.
The second subsidiary, E Ltd. Assembles desktop computers using components sourced from
suppliers of keyboards, microchips, monitors, speakers and so on. It sells these computers under its
own brand name through 150 of its own outlets in major shopping centers throughout Dhaka. It is
to commence selling a new computer aimed at students. The management of E Ltd. believes that
the price and marginal revenue equations are as follows:
Page 32 of 66

Q. No. 4.(Contd.)
Price equation: P = 20,000 0.01Q, where P is selling price per computer and Q is sales quantity in
units Marginal revenue (MR) equation: MR = 20,000 0.2Q
The cost of manufacture is expected to be:
Particulars of cost
Taka per unit
Direct materials (bought-in components)
4,000
Direct labor (assemble)
1,500
Variable overheads
500
Fixed overhead (apportioned)
2,000
Required:
(i) For B Ltd. determine the price that should be set for the new toy in order to maximize profit.
(ii) For E Ltd. determine the price that should be set for the new computer under two
circumstances.
(1) To maximize profit for E Ltd.
(2) To maximize revenue for E Ltd.
(iii) Briefly explain what is meant by market skimming, penetration pricing and market
segmentation in the context of product pricing.
(iv) Briefly discuss the typical issues that a company should consider when setting selling prices
for a new product about to be launched.
[Marks: {4+(4+6+3+3)} = 20]
Q. No. 5.
(a) Salespeople at a particular firm forecast what they expect to sell next period. Their supervisors then
review the forecasts and make revisions. Those forecasts are used to set production and purchasing
plans. In addition, salespeople receive a fixed bonus of 20 percent of their salary if they exceed
their forecasts.
Required:
Discuss the incentives of the salespeople to forecast next-period sales accurately. Discuss the tradeoff between using the budget for decision making versus using it as a control device.
(b) Urban Bank is a new small commercial bank operating in Dhaka, Bangladesh. The bank limits
interest rate risk by matching the maturity of its assets to the maturity of its liabilities. By
maintaining a spread between interest rates charged and interest rates paid, the bank plans to earn a
small income. Management establishes a flexible budget based on interest rate for each department.
The car loan department offers five-year loans. It matches certificates of deposits against car loans.
Given all the uncertainty about government fiscal policy, management believes that five-year
savings interest rates could vary between 2 percent and 16 percent for the coming year. The savings
rate is the rate paid on CD savings account. The loan rate is the rate charged on auto loans. The
following table shows the expected new demand for fixed-rate, five-year loans and new supply of
fixed-rate, five-year savings accounts at various interest rates. There are no loans from previous
years. Note that the department maintains a 4 percent spread between loan and savings rates to
cover processing, loan default, and overhead.
Loan rate (%)
6
7
8
9
10
Savings rate (%)

2
3
4
5
6
Loan demand
Tk. 12,100,000
Tk. 10,000,000
Tk. 8,070,000
Tk. 6,030,000
Tk. 4,420,000
Page 33 of 66
Savings supply
Tk. 4,700,000
Tk. 5,420,000
Tk. 8,630,000
Tk. 9,830,000
Tk. 11,800,000

Q. No. 5.(Contd.)
The amount of new loans granted is always the lesser of the loan demand and loan supply. For
simplicity, this bank may lend 100 percent of deposits. Although rates are set nationally, the bank
may pay or charge slightly different rates to limit demand or boost supply as needed in its local
market.
The car loan department incurs processing, loan default, and overhead expenses related to these
accounts. The first two expenses vary, depending on the taka amount of the accounts. The
processing expense is budgeted to be 1.5% of the loan accounts. Default expense is budgeted at 1%
of the amount loaned. Again, loans and savings would ideally be the same. Overhead expenses are
estimated to be Tk. 30,000 for the year, regardless of the amount loaned.
The following table shows an actual income statement for the Car loan department. Included are the
actual loans and savings for the same period.
Interest Income
Interest expense
Net interest income
Fixed overhead
Processing expense
Default expense
Net Income
Loans
Deposits
Tk. 645,766
314,360
331,406
30,200
130,522
77,800
Tk. 92,884
Tk. 8,062,000
Tk. 8,123,000
Required:
(i)
Calculate the processing, loan default, and overhead expenses for each possible interest rate.
(ii)
Create a budgeted income statement for five-year loans and deposits for the Car loan
department given a savings interest rate of 4 percent. Remember to match supply and
demand.
(iii) Calculate the variances and provide a possible explanation.

[Marks: {5+ (4+3+8)} = 20]
= THE END =
Page 34 of 66

CMA AUGUST-2012, EXAMINATION
SUBJECT: 203-COMMERCIAL AND INDUSTRIAL LAWS
Time: Three hours
Marks: 100

Answer any FIVE questions taking at least TWO from each Group A and B
PART-A : COMMERCIAL LAWS
Q. No. 1.
(a) All agreements are not contracts but all contracts are agreements. Explain.
(b) Differentiate between the terms Misrepresentation and Fraud.
(c) What are the rules of a valid offer?
(d) Mr. Sumon started self service system in his shop. Ms. Suborna entered the shop, took a basket
and after taking articles of her choice into the basket reached the cashier for payments. The
cashier refuses to accept the price. Can Mr. Sumon be compelled to sell the said articles to Ms
Suborna?
[Marks: (4 x 5) = 20]
Q. No. 2.
(a) Discuss Caveat Emptor with its exceptions.
(b) Risk Prima Facie passes with property- Discuss with at least two examples.
(c) Differentiate between Right of Lien and Right of stoppage in transit.
[Marks: (8+6+6) = 20]
Q. No. 3.
(a) What are the essential characteristics of a cheque.
(b) Discuss the proposes, meaning and types of crossing a cheque.
(c) Distinguish between negotiation and assignment.
[Marks: (8+6+6) = 20]
Q. No. 4.
Who is the holder and who is the holder in due course of a cheque? Discuss the various privileges of a
holder in due course.
[Marks: 20]
Q. No. 5.
(a) What matters can and cannot be referred to arbitration?
(b) Whats the difference between a general crossing and a special crossing of a cheque?
(c) Whats the difference between Actual breach of contract and Anticipatory breach of contract?
[Marks: (8+6+6) = 20]
Page 35 of 66

SUBJECT: 203-COMMERCIAL AND INDUSTRIAL LAWS
PART-B : INDUSTRIAL LAWS
Q. No. 6.
(a) What do you mean by Public Utility Service? How it differs from Commercial establishment.
(b) Is it compulsory to maintain service book for the workers. What are the contents of a service
book?
(c) In what circumstances the employer may resort to stop of work and what are its procedures.
[Marks: (7+7+6) = 20]
Q. No. 7.
(a) How the relationship of an employer and an employee can be determined as pet BLA-2006?
(b) Can a probationer be reverted to his former post?
(c) Define Industrial Dispute. What are the ingredients of an Industrial Dispute?
[Marks: (7+3+10) = 20]
Q. No. 8.
(a)
(b)
What are the provisions for Maternity Benefits, under the Bangladesh Labor Act, 2006. What will
be the impact in the Garment Factory for enhancement of Maternity Leave.
What are the precautions to be taken in case of fire and precautions to be taken against
dangerous fumes in a factory?
[Marks: (10+10) = 20]
Q. No. 9.
State the provisions of welfare of workers as described in the Bangladesh Labour Act 2006.
[Marks: 20]
Q. No. 10.
(a) Discuss the provision of closure of shops with exceptions as per the BLA-2006.
(b) State the causes of weak Trade union movement in Bangladesh. What are your suggestions to
improve in this regard?
[Marks: (10+10) = 20]
= THE END =
Page 36 of 66

SUBJECT: 204.TAXATION
Time: Three hours
Full Marks: 100




Q. No. 1.
Write short notes on the followings:
(a) Arms Length Price;
(b) Facilitator of Alternative Dispute Resolution;
(c) Temporary Registration Number (TRN) for income tax purpose;
(d) e-payment of tax.
[Marks: 44 = 16]
Q. No. 2
(a) Mr. X, an employee of a limited company, received the following salaries and allowances during
the income year ended 30 June 2012.
(1) Basic salary
Tk. 4,44,000
(2) House rent allowance
2,00,000
(3) Festival bonus equal to two months basic salary
(4) Leave encashment
37,000
(5) Conveyance allowance
24,000
(6) Contribution to recognized provident fund @ 8%
33,600
(7) Servants wages
24,000
(8) Children education allowance
60,000
(9) Leave fare assistance
50,000
(10) Bungalow utilities
25,000
Compute the excess perquisite u/s 30(e) for the assessment year 2012-2013.
(b) (i) What are the consequences if payment of advance tax is more or less than the required
amount?
(ii) Mr. Jalil computed his advance tax for the income year 2009-2010 based on latest regular
assessment of Tk. 12,00,000 total income including Tk. 50,000 capital gain and Tk. 1,50,000
agricultural income. He has paid advance tax accordingly @ 25%. Regular assessment for
assessment year 2010-11 was completed on August 31, 2012 and total income assessed was
Tk. 10,00,000 where the amount of capital gain and agricultural income were Tk. 75,000 and
Tk. 1,25,000 respectively. Tax rate applicable is 25%. Show the relevant calculations related
to advance tax.
[Marks: (4+3+7) = 14]
Q. No. 3
Mr. Rahman, General Manager of ABC Co. Ltd., a public Limited company, has earned the following
income for the year ended June 30, 2012.
A. Salary Income:
(i) Basic salary p.m
Tk. 35,000
(ii) Festival bonus
Tk. 70,000
(iii) Incentive bonus equal to two months basic salary
(iv) Free furnished accommodation
(v) Employers contribution to recognized P.F @ 10% on basic salary.
(vi) Provision of a car which is exclusively for his personal use.
(vii) Payment of Tk. 15,000 p.a. against his life insurance premium.
Page 37 of 66

Q. No.3.(Contd..)
B.
Property Income:
Mr. Rahman and his wife owned two house properties of which he resides in one, the annual value
of which is Tk. 3,00,000 p.a. and another he rented to Mr. A on which he receives Tk. 3,50,000 p.a.
Expenses incurred are as follows:
(i) City Corporation tax
Tk. 50,000 p.a (Tk. 20,000 for self-occupied house and
Tk. 30,000 for other)
(ii) Insurance premium
15,000 p.a (Tk. 5,000 for self-occupied house and
Tk. 10,000 for other)
(iii) Collection charges
24,000 p.a
(iv) Water bill (his own portion)
20,000 p.a
C.
Income from other source:
(i) Mr. Rahman has received Tk. 55,000 as directors fee from a company where he is a parttime director on which the company paid Tk. 550 VAT.
(ii) He has received Tk. 40,000 as dividend from a listed company on which tax has been
deducted @ 10%.
(iii) He has received Tk. 50,000 as interest on Savings Bank A/C on which tax has been deducted
@ 10%.
Mr. Rahman has invested Tk. 50,000 in purchasing Bangladesh Sanchayapatra during the year.
Compute the total income and tax payable of Mr. Rahman mentioning the assessment year.
[Marks: 20]
Q. No. 4
From the following Profit & Loss Account of Oman Bank, a non-resident bank, for the year ended on
31/12/2011, compute total income and tax liability:
Particulars
Salaries and allowances
Interest on deposit
Car maintenance
Head office expenses
(as per allocation by head office)
Bad debt
Provision for bad debt
Audit fee
Depreciation
Technical fee
Scholarship to poor students
Special reserve
Advertisement
Entertainment
Traveling :
(a) within the country
(b) outside the country (including head
office tour)
Debit (Tk.) Particulars

20,00,000 Interest and commission
40,00,000 Gain from sale of old car
5,00,000
Net profit
4,00,000
1,30,00,000
Credit (Tk.)
1,20,00,000
10,00,000
3,00,000
6,00,000
4,00,000
2,00,000
15,00,000
1,00,000
8,00,000
2,00,000
7,00,000
8,00,000
50,000
4,50,000
Page 38 of 66
1,30,00,000

Q. No. 4. (Contd..)
Additional Information:
(1) Salaries and allowances include incentive bonus to employees Tk. 3,00,000.
(2) VAT at source was not deducted from car workshop bill of Tk. 2,00,000.
(3) Provision for bad debt is within 1% of classified loan.
(4) Tax depreciation as per tax law is Tk. 10,00,000.
(5) Advertisement bill paid to advertisement agency for periodic advertisement to private TV channel.
No tax at source was deducted from the bill because agent submitted their bill without any break-up
of commission.
(6) The car sold was purchased 5 years ago at Tk.50,00,000 and its book value (assumed to be written
down value as per tax law) was Tk.25,00,000 at the time of sale at Tk.35,00,000
[Marks: 20]
Q. No. 5.
(a) Explain the procedure of payments of VAT as provided under Rule 23 and submission of returns
under rule 24 VAT Act 1991.
(b) What are the provisions with regard to refund of VAT on exports?
(c) State the provisions of law for determination of value u/s 5 of VAT the Act 1991.
(d) Distinguish between Countervailing Duty and Antidumping Duty.
[Marks: (4 x 5) = 20]
Q. No. 6.
Mr. Azim owns a house the municipal value of which is Tk.2,20,000. Half of the house has been let out at
Tk. 25,000 per month. The rest of the house is used by his son-in-law who pays nothing for the use.
Following were the expenses of the house:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vi)
(viii)
White wash and repair

Municipal tax
Insurance premium
Service charge
Interest on mortgage
Water and sewerage charge
Land revenue
Cost of alteration
Tk. 6,000
Tk. 5,000
Tk. 4,000
Tk. 6,000
Tk. 4,000
Tk. 7,000
Tk. 2,000
Tk.15,000
He has another residential house situated at Uttara, Dhaka. The City Corporation, for municipal tax
purpose, valued its annual value at Tk.200,000. He spent Tk. 6,000 for its repair and paid City
Corporation tax at Tk. 5,000. He also paid interest on a loan taken from Agrani Bank for alteration and
expansion of the house for which interest payable was Tk. 20,000 per year.
Compute Income from house property for the assessment year 2012-13.
[Marks: 10]
= THE END =
Page 39 of 66

PROFESSIONAL LEVEL-III
SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II
Time: Three hours




Full marks: 100
Q. No. 1.
(a) Why is it necessary to distinguish pre-acquisition dividends from post-acquisition dividends?
(b) On 1 July, 2010, two companies New Plymouth Ltd. and Whangarei Ltd. sign an agreement
whereby the operations of Whangarei Ltd. are to be taken over by New Plymouth Ltd. Whangarei
Ltd. is to liquidate after the transfer is complete. The balance sheets of the two companies on that
day were as follows:
New Plymouth Ltd.
Whangarei Ltd.
Cash
Tk. 50,000
Tk. 20,000
Accounts receivable
75,000
56,000
Inventory
56,000
29,000
Land
65,000
-Plant and equipment
180,000
167,000
Accumulated depreciation plant and equipment
(60,000)
(40,000)
Shares in Sefton Ltd.
-26,000
Debentures in Akaroa Ltd. (face value)
10,000
-Tk. 376,000
Tk. 258,000
Accounts payable
Mortgage loan
10% Debentures (face value)
Contributed equity:
Ordinary shares of Tk. 1.00, fully paid
A class shares of Tk. 2.00, fully paid
B class shares of Tk. 1.00, fully paid
Retained earnings
62,000
75,000
100,000
31,000
21,500
30,000
100,000
--39,000
Tk. 376,000
-40,000
60,000
75,500
Tk. 258,000
Acquisition of Whangarei Ltd.

New Plymouth Ltd. is to acquire all of the assets of Whangarei Ltd. (except for cash). The assets of
Whangarei Ltd. are recorded at their fair values, except for:
Carrying Amount
Fair Value
Inventory
Tk. 29,000
Tk. 39,200
Plant and equipment
127,000
140,000
Shares in Sefton Ltd.
26,000
22,500
In exchange, the A class shareholders of Whangarei Ltd. are to receive one 7% debenture in New
Plymouth Ltd., redeemable on 1 July 2013, for every share held in Whangarei Ltd. The fair value of each
debenture is Tk. 3.50. The B class shareholders of Whangarei Ltd. are to receive two shares in New
Plymouth Ltd. for every three shares held in Whangarei Ltd. The fair value of each New Plymouth Ltd.
share is Tk. 2.70. Costs to issue these shares will amount to Tk. 900.
Page 40 of 66

Q. No. 1 (Contd....)
Additionally, New Plymouth Ltd. is to provide Whangarei Ltd. with sufficient cash, additional to that
already held, to enable Whangarei Ltd. to pay its liabilities. The outstanding debentures are to be
redeemed at a 10% premium. Annual leave entitlements of Tk. 16,200 outstanding at 1 July 2010 and
expected liquidation costs of Tk. 5,000 have not been recognized by Whangarei Ltd. Costs to transport
and install Whangarei Ltd.s assets at New Plymouth Ltd.s premises will be Tk. 1,600.
Required:
(i)
Prepare the acquisition analysis and journal entries in the records of New Plymouth Ltd. to record
the acquisition of Whangarei Ltd.
(ii) Prepare the Liquidation, Liquidators Cash, and Shareholders Distribution ledger accounts of
Whangarei Ltd.
Marks: (4+12+9) = 25]
Q. No. 2.
On 1 July 2010, Dare Ltd. acquired all the share capital of Devil Ltd. for Tk. 160,000. The financial
statements of the two entities at 30 June 2011 contained the following information:
Dare Ltd.
Devil Ltd.
Sales revenue
Tk. 239,800
Tk. 200,000
Dividend revenue
12,000
-Other income
6,600
-258,400
200,000
Cost of sales
123,000
120,000
Others expenses
34,600
20,000
157,600
140,000
Profit before income tax
100,800
60,000
Income tax expense
32,000
20,000
Profit for the period
68,800
40,000
Retained earnings (1/7/10)
24,000
12,000
Total profit available for appropriation
92,800
52,000
Dividend paid from 2009-10 profit
18,000
5,000
Interim dividend paid from 2010-11 profit
16,000
4,800
Dividend declared from 2010-11 profit
16,000
7,200
Transfer to general reserve
8,000
-58,000
17,000
Retained earnings (30/6/11)
Tk. 34,800
Tk. 35,000
Current assets
Cash
Tk. 1,000
Tk.
40
Receivables
27,000
12,100
Allowance for doubtful debts
(500)
(300)
Inventory
68,000
57,000
Total current assets
95,500
68,840
Non-current assets
Plant and machinery
Tk. 100,000
Tk. 72,000
Accumulated depreciation
(40,000)
(26,000)
Land
107,300
190,000
Debentures in Devil Ltd.
57,000
-Shares in Devil Ltd.
155,000
-Total non-current assets
379,300
236,000
Total assets
474,800
304,840
Page 41 of 66

Q. No. 2 (Contd....)
Current liabilities
Dividend payable
16,000
7,200
Provisions
12,000
8,800
Bank overdraft
-14,840
Current tax liabilities
11,000
10,000
Total current liabilities
39,000
40,840
12% mortgage debentures
-80,000
Deferred tax liabilities
13,000
5,000
Total non-current liabilities
13,000
85,000
Total liabilities
52,000
125,840
Net assets
Tk. 422,800
Tk. 179,000
Equity
Share capital
Tk. 320,000
Tk. 120,000
General reserve
68,000
24,000
Retained earnings
34,800
35,000
Total equity
Tk. 422,800
Tk. 179,000
Additional information:
(a) At 1 July 2010, all identifiable assets and liabilities of Devil Ltd. were recorded at fair values except
for inventory for which the fair value was Tk. 1,000 greater than carrying amount. This inventory
was all sold by 30 June 2011. At 1 July 2010, Devil Ltd. had research and development outlays that
it had expensed as incurred. Dare Ltd. measured the fair value of the in-process research and
development at Tk. 8,000. By 30 June 2011, it was assessed that Tk. 2,000 of this was not
recoverable. At 1 July 2010, Devil Ltd. had reported a contingent liability relating to a guarantee
and which was considered to have a fair value of Tk. 7,000. This liability still existed at 30 June
2011. At 1 July 2010, Devil Ltd. had not recorded any goodwill.
(b) The debentures were issued by Devil Ltd. at nominal value on 1 July 2009, and are redeemable on
30 June 2015. Dare Ltd. acquired its holding (Tk. 60,000) of these debentures on the open market
on 1 January 2011, immediately after the half-yearly interest payment had been made. All interest
has been paid and brought to account in the records of both entities.
(c) During the 2010-11 period, Dare Ltd. sold inventory to Devil Ltd. for Tk. 40,000, at a mark-up of
cost plus 25%. At 30 June 2011, Tk. 10,000 worth of inventory is still held by Devil Ltd.
(d) On 1 January 2011, Devil Ltd. sold an item of inventory to Dare Ltd. which planned to use it as a
non-current assets, depreciable at 10% p.a. on cost. Dare Ltd. paid Tk. 30,000 for this item, with
Devil Ltd. having manufactured it at a cost Tk. 24,000.
(e) The income tax rate is 30%.
Required:
(i)
Prepare the adjusting journal entries for the consolidation at 30th June 2011.
(ii) Prepare the consolidated income statement, consolidated statement of changes in equity and the
consolidated balance sheet for Dare Ltd. and its subsidiary as required for the year ended 30 June
2011.
[Marks: {15+(5+7+8)} = 35]
Page 42 of 66

Q. No. 3.
(a) Lemon Ltd. prepares its financial statements to 30 September each year. On 1 October 2006
Lemon had 10 million 50c shares in issue and on 1 April 2007 made a 1 for 5 rights issue at a price
of $ 1.20 per share. The market price of a Lemon share immediately before the rights issue was $
1.50. Earnings for the year ended 30 September 2007 were $ 4,697,000.
Lemon Ltd. also has in issue $ 3,200,000 of 6% convertible redeemable loan stock with the
following terms of conversion for every $ 100 of loan stock.
Conversion at 30 September 2008
108 shares
Conversion at 30 September 2009
104 shares
The liability component of the convertible redeemable loan stock was carried in the Balance Sheet
on 1 October 2006 at $ 3 million and the effective interest rate is 9%. Lemon Ltd. pays tax at a rate
of 30%.
Required:
(i)
Calculate basic and diluted EPS for the year ended 30 September 2007.
(ii) Explain to a shareholder of Lemon Ltd. the usefulness and limitations of the diluted EPS
figure.
(b) The Orton Company is a retailer of artworks and sculptures. Orton has a year end of 31 December
2007 and uses pounds sterling as its functional currency. On 28 October 2007, Orton purchased 10
paintings from a supplier for N$ 920,000 each, a total of N$ 9,200,000.
Exchange rates were as follows:
28 October 2007
1:N$1.8
19 December 2007
1:N$1.9
31 December 2007
1:N$2.0
8 February 2008
1:N$2.4
Orton sold seven of the paintings for cash on 19 December 2007 with the remaining three
paintings being sold on 8 February 2008. All 10 of the paintings were paid for by Orton on 8
February 2008.
Required:
What exchange gain did arise from the transaction relating to the paintings in Ortons financial
statements for the year ended 31 December 2007 according to IAS 21/BAS 21 The Effects of
Changes in Foreign Rates?
[Marks: (8+5) + 7 = 20]
Q.No.4
(a) H.P Limited, a manufacturing business, exports some of its products through an overseas branch
whose currency is Florins, which carries out the final assembly operation before selling the
goods. The Trial Balance of the Head office and the branch on June 30, 2011 were as under:
Heads of Account
Freehold building at cost
Debtors/ Creditors
Sales
Issued share capital
Components sent to branch
Head Office
Dr. (Tk.
Cr. (Tk.)
14,000
8,900
9,500
1,04,000
40,000
35,000
Page 43 of 66
Branch
Dr. (FL)
Cr. (FL)
63,000
36,000
1,560
4,32,000

Q. No. 4. (Contd....)
Head Office/ Branch
Branch Cost of sales
Provision for depreciation on machinery
H.O. cost of sales (including goods sent to branch)
Administrative cost
Stock on 30th June 2011
Profit & Loss Account
Machinery at cost
Remittances
Cash at bank
Selling and distribution cost
TOTAL
60,100
5,04,260
3,60,000
1,500
59,000
15,200
28,900
56,700
18,000
11,520
2,000
6,000
28,000
4,600
23,300
2,20,000
2,20,000
1,26,000
2,72,000
79,200
28,800
9,94,520
9,94,520
Following adjustments are to be made:

(1)
The cost of sales figure includes a depreciation charge of 10% per annum on the cost of
machinery.
(2) A provision of Tk.300 for unrealized profits in the branch stock is to be made.
(3) On 26th June, 2011 the branch remitted 16,000 FL. This amount was received by the H.O. on 14th
July, 2011 and realised Tk.1,900.
(4) During May 2011, a customer of the branch by mistake paid the H.O. for goods supplied by the
branch. The amount due from him was FL 320 which realised Tk.36. It has been correctly dealt
with by H.O. but not yet entered in the Branch Accounts.
(5) Provide commission at 5 per cent of the net profits of the branch after charging such commission
which is payable to the Branch Manager.
(6) The exchange rates were : (a) At 1st July, 2010 : 10 FL = 1 Tk.; (b) At 30th June, 2011 :
8 FL = 1
Tk.; (c) Average rate for the year; 9 FL = 1 Tk.; and (d) On date of purchase of building and
machinery : 7 FL = 1 Tk.
Required:
You are required to prepare for internal use:
(i) Branch Trial Balance (after above adjustments) in H.O. currency.

(ii) Detailed Profit & Loss Accounts of H.O. and the branch for the year ending 30th June, 2011.
(iii) Balance Sheet as at 30th June, 2011 (combined figures of the H.O. and the branch). Ignore taxation.
[Marks: (6+7+7) = 20]
=THE END=
Page 44 of 66

SUBJECT: 302-ADVANCED COST ACCOUNTING
Time: Three hours




Full marks: 100
Q. No. 1.
(a)
Express an opinion as to the usefulness of data, derived from process costing for the control of
costs.
(b)
M/s. Pahartoli Company produces three products, Alpha, Beta and Gamma. Alpha, and Gamma
are joint products while Beta is a by-product of Alpha. No joint cost is to be allocated to the byproduct. The production processes for a given year are as follows:
(i)
In Department I, 1,10,000 (One Lac Ten Thousand) pounds of material, Rho, are processed at
a total cost of Tk.1,20,000. After processing, 60% of the units are transferred to Department
II and 40% of the units (now Gamma) are transferred to Department III.
(ii)
In Department II, the material is further processed at a total additional cost of Tk. 38,000.
70% of the units (now Alpha) are transferred to Department IV and 30% emerge as Beta, the
by-product, to be sold at Tk. 1.20 per pound. The marketing expense related to Beta is Tk.
8,100.
(iii)
In Department IV, Alpha is processed at a total additional cost of Tk.23,660. After

processing, Alpha is ready for sale at Tk. 5 per pound.
(iv)
In Department III, Gamma is processed at a total additional cost of Tk. 1,65,000. In this
Department, a normal loss of units of Gamma occurs, which equals 10% of the goods output
of Gamma. The remaining goods output is sold for Tk. 12 per pound.
Required:
(a)
(b)
Prepare a schedule showing the allocation of the Tk. 1,20,000 joint between Alpha and Gamma
using the market value at split off point and treating the net realizable value of Beta as an addition
to the sales value of Alpha.
Prepare a statement of gross profit for Alpha, independent of the answer to requirement (a),
assuming that:
(i)
Tk. 1,02,000 of total joint cost was appropriately allocated Alpha.
(ii) 48,000 pounds of alpha and 20,000 pounds of Beta were available for sale.
(iii) During the year, sales of Alpha were 80% of the pounds available for sale. There is no
beginning inventory.
(iv) The net realization value of Beta available for sale is to be deducted from the cost of
producing Alpha. The ending inventory of Alpha is to be based on the net cost of production.
(v) All other costs, sales prices and marketing expenses are those presented in the facts of the
original problem.
[Marks :{ 6+ (7+7)} = 20]
Page 45 of 66

Q. No. 2.
The Furniture Division of Royal Industries manufactures and sells chairs. The chairs are manufactured in
two versions a metal model and a plastic model. The chairs are manufactured on two different
assembly lines located in adjoining buildings. The actual sales and CM ratio for actual mix for the first
three months of the fiscal year as compared to the budget are presented below.
Sale in units:
Plastic model
Metal model
Sales revenue:
Plastic model
Metal model
Total sales
Actual
Budget
60,000
20,000
50,000
25,000
Tk. 630,000
300,000
Tk. 930,000
Tk. 500,000
375,000
Tk. 875,000
CM ratio:
Actual mix
.1844
Budgeted mix
.1971
The manufacturing activities for the quarter resulted in the production of 55,000 plastic chairs and
22,500 metal chairs. The actual costs incurred by each manufacturing unit are presented below.
Plastic Model
Metal Model
Raw materials (stated in equivalent finished chairs):
Purchases:
Plastic 60,000 lbs@ Tk.5.65
Tk.339,000
Metal 30,000 feet @ Tk.6.00
Tk.180,000
Usage:
Plastic 56,000 lbs
Metal 23,000 feet
Direct labor:
9,300 hours @ Tk.6.00 per hour
Tk. 55,800
5,600 hours @ Tk.8.00 per hour
Tk. 44,800
Manufacturing overhead:
Variable
Tk.112,000
Tk. 55,000
Fixed
Tk. 27,900
Tk. 21,300
The standard variable manufacturing costs per unit and the budgeted monthly fixed manufacturing costs
established for the current year are presented below:
Plastic Model
Raw materials
Plastic 1 lb @ Tk.5.00
Metal 1 foot @ Tk.6.00
Direct labor:
1/6 hour @ Tk. 6.00 per DLH
1/4 hour @ Tk. 8.00per DLH
Variable manufacturing overhead:
1/6 hour @ Tk.12.00 per DLH
1/4 hour @ Tk.8.00 per DLH
Standard variable manufacturing cost per unit
Budgeted fixed costs per month
Page 46 of 66
Metal Model
Tk.5.00
Tk.6.00
Tk.1.00
Tk.2.00
Tk. 2.00
Tk. 8.00
Tk.9,100
Tk. 2.00
Tk. 10.00
Tk.6,900

Q. No. 2.(Contd)
Required:
(a) Calculate:
(i) Sales price variance;
(ii) Sales mix variance;
(iii) Sales volume variance.
(b) Analyze the variances of variable manufacturing costs in as much detail as the data permit.
[Marks: (10+ 10) = 20]
Q. No. 3.
(a) The manager of the personnel department of a company received his management for the month
of June which showed an unfavorable spending variance for computer services Tk.40,000. The
manger believed that the unfavorable variance was the result of excessive time usage on the
computer caused by an inefficient software program that used too many steps of calculation. He
had to make a choice between continuing to use the program for the next six months until a new
computer software package was implemented or calling in a programmer now to correct the fault.
He believed that there was a 20% chance he was wrong about the program and that the cost
variance would not occur again and an 80% chance he was correct and the cost overrun would
occur again. He estimated that the computer programmer would cost the department Tk.90,000
and even if the programmer was called there was only a 60% chance that the new program would
correct the fault.
Required:
Prepare a decision table indicating what action you believe that the manager should take.
(b) ABC Bank Limited has a small branch at Kaligonj in Satkhira. The counter is staffed by one teller.
The counter is open for five hours (300 minutes) each day (the operating capacity). It takes five
minutes to serve a customer (service time). The Kaligonj Branch expects to serve 40 customers
each day. ( Note that the number of customers corresponds to the number of orders as required
for control of cost and quality)
Required:
(i)
Using the formula and concept of Time drivers and costs of time. Calculate how long, on
average a customer will wait in line before being served.
(ii) How long on average will a customer wait in line if the branch expects to serve 50 customers
each day?
[Marks: (10+10) = 20]
Q. No. 4.
Telecoms At Works (TAW) manufactures and markets office communications systems. During the year
ended 31 May, 2012 TAW made an operating profit of Tk. 30 million on sales of Tk. 360 million.
However, the directors are concerned that products do not conform to the required level of quality and
TAW is therefore not fulfilling its full potential in terms of turnover and profits achieved.
The following information is available in respect of the year ended 31 May 2012:
(1) Production data:
Units manufactured and sold
18,000
Units requiring rework
2,100
Units requiring warranty repair service
2,700
Design engineering hours
48,000
Process engineering hours
54,000
Inspection hours (manufacturing)
288,000
Page 47 of 66

Q. No. 4.(Contd)
(2)
Cost data:
Tk.
Design engineering per hour
96
Process engineering per hour
70
Inspection per hour (manufacturing)
50
Rework per communication system reworked (manufacturing)
4,800
Customer support per repaired unit (marketing)
240
Transportation costs per repaired unit (distribution)
280
Warranty repairs per repaired unit (customer service)
4,600
(3) Staff training costs amounted to Tk. 180,000 and additional product testing costs of Tk. 72,000.
(4) The marketing director has estimated that sales of 1,800 units were lost as a result of public
knowledge of poor quality at TAW. The average contribution per communication system is
estimated at Tk. 7,200.
Required:
(i)
Prepare a cost analysis which shows actual prevention costs, appraisal costs, internal failure costs,
and external failure costs for the year ended 31 May 2012. Your statement should show each cost
heading as a % of turnover and clearly show the total cost of quality. Comment briefly on the
inclusion of opportunity costs in such an analysis.
(ii) A detailed analysis has revealed that the casings in which the communications systems are housed
are often subject to mishandling in transit to TAWs manufacturing premises. The directors are
considering two alternative solutions proposed by the design engineering team which are aimed
at reducing the quality problems that are currently being experienced. These are as follows:
Option 1 Increase the number of immediate physical inspections of the casing when they are
received from the supplier. This will require an additional 10,000 inspection hours.
Option 2 Redesign and strengthen the casings and the containers used to transport them to
better withstand mishandling during transportation. Redesign will require an additional 2,000
hours of design engineering and an additional 5,000 hours of process engineering.
Internal failure costs of rework for each reworked communication system are as follows
Tk.
Variable costs (including direct materials, direct labor rework and supplies)
1,920
Allocated fixed costs (equipment, space and allocated overhead)
2,880
Total costs (as per note 2 on cost data)
4,800
The directors of TAW believe that, even if it is able to achieve improvements in quality, it will be
unable to save any of the fixed costs of internal and external failure.
If TAW chooses to inspect the casings more carefully, it expects to eliminate re-work on 720
communication systems whereas if it redesigns the casings it expects to eliminate rework on 960
communication systems.
If incoming casings are inspected more carefully, TAW estimates that 600 fewer communication
systems will require warranty repair and that it will be able to sell an additional 300
communication systems. If the casing is redesigned, the directors estimate that 840 fewer
communication systems will require warranty repair and that an additional 360 communication
systems will be sold.
Page 48 of 66

Q. No. 4.(Contd)
External failure costs of repair for each repaired communication system are as follows:
Variable costs (Tk.)
Fixed costs (Tk.)
Total costs (Tk.)
Customer support costs
96
144
240
Transportation costs
210
70
280
Warranty repair costs
1,700
2,900
4,600
Required:
Prepare an estimate of the financial consequences of each option and advise the directors of TAW
which option should be chosen.
[Marks: (11+9) = 20]
Q. No. 5.
(a) CIC Co. specializes in the manufacture of a small range of hi-tech products for the fitness market.
They are currently considering the development of a new type of fitness monitor, which would be
the first of its kind in the market. It would take one year to develop, with sales then commencing
at the beginning of the second year. The product is expected to have a life cycle of two years,
before it is replaced with a technologically superior product. The following cost estimates have
been made.
Year 1
Year 2
Year 3
Units manufactured and sold
100,000
200,000
Research and development costs
Tk. 160,000
Product design costs
Tk. 800,000
Marketing costs
Tk. 1,200,000
Tk. 1,000,000
Tk. 1,750,000
Manufacturing costs:
Variable cost per unit
Tk. 40
Tk. 42
Fixed production costs
Tk. 650,000
Tk. 1,290,000
Distribution costs:
Tk. 4
Tk. 4.50
Fixed distribution costs
Tk. 120,000
Tk. 120,000
Selling costs:
Tk. 3
Tk. 3.20
Fixed selling costs
Tk. 180,000
Tk. 180,000
Administration costs
Tk. 200,000
Tk. 900,000
Tk. 1,500,000
Note: You should ignore the time value of money.
Required:
(i)
Calculate the life cycle cost per unit
(ii) Discuss the benefits of life cycle costing.
(b) PSA is a company that manufacturers mobile phones. This market is extremely volatile and
competitive and achieving adequate product profitability is extremely important. PSA is a mature
company that has been producing electronic equipment for many years.
Due to fears over obsolescence PSA holds minimal levels of finished goods, encouraging retailers
to hold inventories instead. PSA has seen volatility in some in some of its inputs as well as with
significant price fluctuations in some raw materials and components. Given this, PSA holds
significant inventories of plastics and other inputs so it can try to avoid buying when prices are
high and to meet unexpected demand from retailers.
The management accountant has recently been on a CPD course that focused on a range of
costing techniques, including back flush accounting.
Required:
Explain what back flush costing is, and comment on the suitability of PSAs operation for back flush
costing.
[Marks: (6+4)+10 = 20]
= THE END =
Page 49 of 66

SUBJECT: 303-CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES
Time: Three hours

Marks: 100
Answer SIX questions taking any THREE from each Part including question no. 5 and 10
PART-A : CORPORATE LAWS

Q. No. 1.
(a) What are the matters to be stated in Memorandum of Association and Articles of Association of a
public company limited by shares?
(b) What is meant by ultra vires? Discuss the effects of ultra vires transaction as far as the company
and its directors are concerned.
[Marks: (8+7) = 15]
Q. No. 2.
(a) What is floating charge? When does it crystallize? What is effect of crystallization of a floating
charge?
(b) List out the various registers required to be maintained statutorily under the Companies Act, 1994.
(c) Articles of association of a company reserved the powers for calling the annual general meeting.
The Managing Director of the company, without reference to the Board, called an annual general
meeting. Is the annual general meeting validly called? If not, what should be done to make it
valid? Discuss with reference to case law, if any.
[Marks: (5+5+5) = 15]
Q. No. 3.
Critically examine the following statements/propositions:
(a) A shareholder of a company is a part-owner of the assets of the company.
(b) Dividends once declared become debts of the company.
(c) On winding-up, a company ceases to be a legal entity.
[Marks: (3 x 5) = 15]
Q. No. 4.
(a) What are the contents of a prospectus? Distinguish between Prospectus and a Statement In-Lieu
of Prospectus.
(b) What are the consequences of false, misleading or concealment of fact in the prospectus?
[Marks: (7+8) = 15]
Q. No. 5.
Elucidate the legal provision of the following:
(a) Closure of Members Register;
(b) Registration of Mortgages;
(c) Casual Vacancy of a Director;
(d) Appointment of an Alternate Director.
[Marks: (4 x 5) = 20]
Page 50 of 66

SUBJECT: 303-CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES
PART-B : CORPORATE GOVERNANCE & SECRETARIAL PRACTICES
Q. No. 6.
(a) Discuss the role of a Company Secretary in Corporate Governance.
(b) Company Secretary is the eye witness to the Board Do you agree? How?
[Marks: (7+8) = 15]
Q. No. 7.
What report /return to which authority and within how many days are to be submitted for the following
situations?
(a) Board recommended 40% stock Dividend of a listed Company;
(b) A Director fails to attend consecutive three Board meetings with in three months;
(c) Holding of Annual General Meeting.
[Marks: (3 x 5) = 15]
Q. No. 8.
(a) Draft specimen resolutions alongwith necessary explanatory statements, wherever required for
transacting the following items of business indicating the kind of meeting at which each resolution
is to be passed and the type of resolution required for:
(i)
EDXL Ltd. has authorized share capital of Tk. 20 crore (2 crore shares of Tk. 10 each). The
company decides to increase its authorized capital to Tk. 25 crore by adding 50 lakh new
shares of Tk. 10 each.
(ii) X was a director of ABC Ltd. all on a sudden X expired. The company decides to appoint Y to
fill that casual vacancy.
(b) Draft a notice to be published in the newspaper regarding forthcoming annual general meeting of
your company.
(c) State the procedure to increase the number of directors beyond the maximum limit fixed by the
articles of association.
[Marks: (5+5+5) = 15]
Q. No. 9.
The corporate legislation holds different types of directors equally responsible for governance of a
corporate entity. The present corporate scenario calls for a change in the mindset of directors to
contribute their might. In the light of this statement, discuss the multi-dimensional responsibilities of
the Board and the diverse role of the directors.
[Marks: 15]
Q. No. 10.
Write short notes (any four):
(a) Common Seal;
(b) Interim Dividend;
(c) Right Share;
(d) Special Resolution;
(e) Statutory Auditor;
(f)
Quorum for meeting.
[Marks: (4 x 5) = 20]
= THE END =
Page 51 of 66

SUBJECT: 304.AUDITING
Time: Three hours
Full Marks: 100




Q. No. 1.
(a) What are the elements of an assurance engagement and what benefits can be derived from an
assurance service?
(b) How do you differentiate Audit and Assurance Engagement?
(c) Generally a firm is engaged for an audit but may also be engaged by management to provide
additional non-statutory and non-assurance services. Write down at least four non-assurance jobs,
outside audit and assurance, generally performed by our firms in Bangladesh.
(d) What are the responsibilities of an auditor regarding fraud under BSA 240?
[Marks: (4+4+4+4) = 16]
Q. No. 2.
(a) What is audit planning? What matters are to be considered in order to develop the overall audit
plan?
(b) An audit program is required to implement the overall audit plan, explain with reference to BSA
300?
(c) Why changes to the audit plan and audit program is required? What an auditor should do in this
respect?
Marks: (6+4+5) = 15]
Q. No. 3.
(a) What is Audit Risk? Explain the different types of Audit Risk.
(b) For each of the following examples, indicate the type of risk:
(i) Vendors payments are processed, booked and reconciled in the system by the same person in
the Accounts Department.
(ii) The assurance firm may do insufficient work to defect material errors.
(iii) The financial statements contain a number of estimates.
[Marks: (5+3+3+3) = 14]
Q. No. 4.
(a) Explain the difference between the responsibilities of internal auditors and external auditors for the
prevention, detection and reporting fraud and error.
(b) Explain the role of internal audit in the context of:
(i) Corporate governance;
(ii) Organizational control.
(c) Outline the issues that should be considered when an organization decides to outsource the internal
audit function.
Marks: (5+6+5) = 16]
Page 52 of 66

SUBJECT: 304.AUDITING
Q. No. 5.
Audit evidence is necessary to support the auditors opinion and report. It is cumulative in nature and is
primarily obtained from audit procedures performed during the course of the audit.
(a) Discuss the attributes of evidence as per BSA 500.
(b) Is 100% examination likely in the case of test of controls? Give examples when 100% examination
may be appropriate?
(c) There will be an impact on sample size when there is an increase in the auditors assessment of the
risk of material misstatement. Explain.
[Marks: (4+4+4) = 12]
Q. No. 6.
The following issues have arisen during the course of the audit of Xtratech Limited listed with DSE:
(i) Depreciation has been calculated on the total of land and buildings. In previous years it has only
been charged on buildings. Total depreciation is BDT 2.5m and the element charged to land only is
BDT 0.7m.
(ii) Xtratech Limiteds computerized wages program is backed up daily, however for a period of two
months the wages records and the back-ups have been corrupted, and therefore cannot be accessed.
Wages and salaries for these two months are BDT 1.1m.
(iii) Xtratech Limiteds main competitor has filed a lawsuit for BDT 5m against them alleging a breach
of copyright; this case is ongoing and will not be resolved prior to the audit report being signed.
The matter is correctly disclosed as a contingent liability.
(iv) Tax and VAT have not been deducted from different type of supplies an aggregated amounting to
BDT 0.5m. These are apparent non compliance of the Income Tax Ordinance, 1984 & VAT law
which may result in imposition of fines, penalty etc.
Current year profit after tax of Xtratech Limited is BDT 10m.
Required:
Discuss each of these issues and describe the impact on the audit report if the above issues remain
unresolved.
[Marks (4+4+4+4) = 16]
Q. No. 7.
Section 220 of Code of Ethics says that the principles of objectivity impose an obligation on all
professional accountants not to compromise their professional or business judgment because of biasness,
conflict of interest or the undue influence of others.
(a) What should a professional accountant do where there is a conflict of interest and what safeguards
are available for a professional accountant in different circumstances?
(b) Conflicts of interest and confidentiality are related matters. Where a conflict of interest arises, one
of key issues is whether it will be possible to keep information confidential, Explain.
[Marks: (5+6) = 11]
= THE END =
Page 53 of 66

PROFESSIONAL LEVEL-IV
SUBJECT: 401.FINANCIAL MANAGEMENT
Time: Three hours
Full Marks: 100




Q. No. 1.
(a) What is the crossover rate in project evaluation?
(b) Under what circumstances will the IRR and NPV rules lead to the same accept-reject decisions?
When might they conflict?
(c) ZXY Company has found that after only two years of using a new machine for a semiautomatic
production process, a more advanced and faster model has arrived on the market, which not only
will turn out the current volume of products more efficiently but will allow an increased output of
the item. The original machine had cost Tk. 32,000 and was being depreciated straight-line over a
10-year period, at the end of which it would be scrapped. The market value of this machine
currently is Tk. 15,000, and a buyer is interested in acquiring it.
The advanced model now available costs Tk. 55,000 and Tk. 500 will be spent for installation, and
because of its more complex mechanism, it is expected to last eight years. A scrap value of Tk.
1,500 is considered reasonable.
The current level of output of the old machine, now running at capacity, is 200,000 units per year,
which the new machine would boost by 15%. There is no question in the minds of the sales
management that his additional output could be sold. The current machine produces the product at a
unit cost of Tk. 0.12 for labor, Tk. 0.48 for materials, and Tk. 0.24 for allocated overhead (at the
rate of 200% of direct labor). At the higher level of output, the new machine would turn out the
product at a unit cost of Tk. 0.08 for labor (because one less operator is needed), Tk. 0.46 for
materials (because of less spoilage), and Tk. 0.16 for allocated overhead. Differences in other
operating costs, such as power, repairs, and supplies are negligible at both volume levels.
If the new machine were run at the old 200,000-unit level, the operators would be freed for a
proportionate period of time for reassignment in other operations of the company.
The additional output is expected to be sold at the normal price of Tk. 0.95 per unit, but additional
selling and promotional costs are expected to amount to Tk. 5,500 per year.
Assume that income taxes at the rate of 36% and the company normally earns 16% after taxes on its
investments.
Required:
(I) Calculate
(i) Payback period;
(ii) Return on Investment;
(iii) Net Present Value (NPV);
(iv) Profitability Index with net investment basis and without terminal value;
(v) Present Value Payback Period;
(vi) Internal Rate of Return (IRR); and
(vii) Modified Internal Rate of Return (MIRR).
(II) Draft a brief report for presentation to the board of directors with a recommendation on the
acceptability of this project and on the techniques that the board should consider when
reviewing capital investment projects in future.
[Marks: {2+3+ (7 x 2+4)} = 23]
Page 54 of 66

Q. No. 2.
PKA Co is a regional company that sells goods solely within South Asia. The recently-appointed
financial manager of PKA Co has been investigating the working capital management of the company
and has gathered the following information.
Inventory management
The current policy is to order 100,000 units when the inventory level falls to 35,000 units. Forecast
demand to meet production requirements during the next year is 625,000 units. The cost of placing and
processing an order is Tk.250, while the cost of holding a unit in stores is Tk.0.50 per unit per year. Both
costs are expected to be constant during the next year. Orders are received two weeks after being placed
with the supplier. You should assume a 50-week year and that demand is constant throughout the year.
Accounts receivable management
Domestic customers are allowed 30 days credit, but the financial statements of PKA Co. show that the
average accounts receivable period in the last financial year was 75 days. The financial manager also
noted that bad debts as a percentage of sales, which are all on credit, increased in the last financial year
from 5% to 8%.
Required:
(i) Calculate the cost of the current ordering policy and determine the saving that could be made by
using the economic order quantity model.
(ii) Discuss ways in which PKA Co. could improve the management of domestic accounts receivable.
[Marks: (6+6) = 12]
Q. No. 3.
(a) What is the difference between a Eurobond and a foreign bond?
(b) Suppose the Japanese yen exchange rate is 118 = $1, and the British pound exchange rate is
1 = $1.81
(i) What is the cross-rate in terms of yen per pound?
(ii) Suppose the cross-rate is 204 = 1. Is there an arbitrage opportunity here? If there is, explain
how to take advantage of the mispricing.
(c) Company A wishes to borrow 10 million at a fixed rate for 5 years and has been offered either
11% fixed or Six-month LIBOR + 1%. Company B wishes to borrow 10 million at a floating rate
for 5 years and has been offered either Six-month LIBOR + 0.5% or 10% fixed.
Required:
(i) How may they enter into a swap arrangement in which each benefits equally.
(ii) What risk may this arrangement generate?
[Marks: (2+5+8) = 15]
Q. No. 4.
(a) Calculate the operating leverage, financial leverage and combined leverage from the following data
under Situations I and II and Financial Plans A and B:
Installed capacity
4,000 units
Actual production and sales
75% of the capacity
Selling price
Tk. 30 per unit
Variable cost
Tk. 15 per unit
Fixed Cost:
Under situation I
Tk. 15,000
Under situation II
Tk. 20,000
Page 55 of 66

Q. No. 4.(Contd)
Capital Structure:
Equity
Debt (Rate of interest at 20%)
(b)
(c)
Financial Plan
A
B
Tk. 10,000
Tk. 15,000
10,000
5,000
20,000
20,000
Hypothetical Ltd. is expanding its facilities. In the coming year, the company will either purchase
or lease equipment which it plan to use for 4 years and then replace it with a new one. Its current
tax bracket is 50 percent. The other data are as follows:
PURCHASE:
(i) The purchase price of the equipment is Tk. 40,00,000; (ii) The expected salvage value after 4
years is Tk. 10,00,000; (iii) The equipment is subject to the straight line method of depreciation;
(iv) Funds to finance the equipment can be obtained at 16 percent; (v) The loan is to be repaid in
four equal annual installments due at the end of each year; (vi) The equipment will increase the
annual revenues by Tk. 30,00,000 and increase annual cash operating cost by Tk. 20,00,000.
LEASE:
(i) The annual lease is Tk. 10,00,000; (ii) The lease rent is payable at the end of each year for 4
years; (iii) The equipment will increase annual revenues by Tk. 30,00,000 and increase annual nondepreciation operating costs by Tk. 19,00,000 as the lessor will pay Tk. 100,000 for the
maintenance costs associated with the equipment.
Required: Determine whether the company should purchase or lease the equipment.
Below are the distributions of Sugar Kane and Best Candy in the given economic scenarios.
Economic Scenarios
Probability
Best Candy
Sugar Kane
T-Bills
Normal Year for Sugar

Bullish stock Market
Bearish Stock Market
0.5
0.3
Rate of Return (%)
25
10
7
-5
5
5
Abnormal Year
Sugar Crisis
0.2
-25
20
5
Required:
(i) What would be the correlation of Sugar Kane with Best Candy?
(ii) Calculate the portfolio rate of return in each scenario and the standard deviation of the
portfolio from the scenario returns. Then evaluate portfolio standard deviation (assume
previous correlation coefficient being -0.86). Provided that investment ratio between Sugar
Kane and Best Candy are equal.
(iii) Is Sugar Kane stock a useful hedge asset now?
(iv) Are the two methods of computing portfolio standard deviations consistent?
[Marks: (8+10+12) = 30]
Page 56 of 66

Q. No. 5.
(a) Explain the concepts of horizontal, vertical and conglomerate mergers with example. What are the
important reasons for mergers and takeovers?
(b) Small Company is being acquired by Large Company on a share exchange basis. Their selected
data are as follows:
LARGE Co.
SMALL Co.
Profit after tax (Tk. in lakh)
56
21
Number of shares (lakh)
10
8.4
Earning per share
5.6
2.5
Price earning ratio
12.5
7.5
Required: Determine:
(i) Pre-merger market value per share and
(ii) The maximum exchange ratio Large Company should offer without the dilution of
(1) EPS; and
(2) Market value per share.
[Marks: (8+12) = 20]
= THE END =
Page 57 of 66

SUBJECT: 402-STRATEGIC MANAGEMENT ACCOUNTING.
Time: Three hours




Marks: 100
Q. No. 1.
The Border Agriculture Group (BAG), which has a divisional structure, produces a range of products for
the farming industry. Divisions B and C are two of its divisions. Division B sells a fertilizer product (BF) to
customers external to BAG. Division C produces a chemical (CC) which it could transfer to Division B for
use in the manufacture of its product BF. However, Division C could also sell some of its output of
chemical CC to external customers of BAG.
An independent external supplier to The Border Agriculture Group has offered to supply Division B with
a chemical which is equivalent to component CC. The independent supplier has a maximum spare
capacity of 60,000 kilograms of the chemical which it is willing to make available (in total or in part) to
Division B at a special price of Tk.55 per kilogram.
Forecast information for the forthcoming period is as follows:
Division B:
Production and sales of 360,000 liters of BF at a selling price of Tk.120 per liter.
Variable conversion costs of BF will amount to Tk.15 per liter.
Fixed costs are estimated at Tk.18,000,000.
Chemical (CC) is used at the rate of 1 kilogram of CC per 4 liters of product BF.
Division C:
Total production capacity of 100,000 kilograms of chemical CC.
Variable costs will be Tk.50 per kilogram of CC.
Fixed costs are estimated at Tk.2,000,000.
Market research suggests that external customers of BAG are willing to take up sales of 40,000
kilograms of CC at a price of Tk.105 per kilogram. The remaining 60,000 kilograms of CC could be
transferred to Division B for use in product BF. Currently no other market external to BAG is available for
the 60,000 kilograms of CC.
Required:
(i)
State the price/prices per kilogram at which Division C should offer to transfer chemical CC to
Division B in order that the maximization of BAG profit would occur if Division B management
implement rational sourcing decisions based on purely financial grounds.
(ii) Division C is considering a decision to lower its selling price to customers external to the group to
Tk.95 per kilogram. This decision if implemented is expected to increase sales to external
customers to 70,000 kilograms.
Prepare a detailed analysis of revenue, costs and net profit of BAG using both current and
proposed selling prices of CC.
[Marks: (8+12) = 20]
Page 58 of 66

Q. No. 2.
(a)
A common theme running through many of the cost accounting topics involves maintaining
compatibility between overall organizational goals and the goals of individual managers. This is a
particularly difficult problem in the areas of transfer pricing and capital budgeting. Goal
congruence problems can be created by traditional mechanisms that are used to evaluate
managerial performance (such as return on investment (ROI) and residual income (RI)). As
specifically as possible, recommend additional mechanisms to evaluate managerial performance
that will overcome the goal congruence problems associated with these traditional evaluation
measures.
(b)
The Sloan Roadlines transports household goods from one city to another within Bangladesh. It
measures quality of service in terms of (a) time required to transport goods, (b) on-time delivery
(within two days of agreed-upon delivery date), and (c) number of lost or damaged shipments.
Sloan is considering investing in a new scheduling-and-tracking system costing Tk. 16,00,000 per
year, which should help it improve performance with respect to items (b) and (c). The following
information describes Sloans current performance and the expected performance if the new
system is implemented.
Current
Expected Future
Performance
Performance
On-time delivery performance
85%
95%
Variable cost per carton lost or damaged
Tk. 600
Tk. 600
Fixed cost per carton lost or damaged
Tk. 400
Tk. 400
Number of cartons lost or damaged per year
3,000 cartons
1,000 cartons
Sloan expects each percentage point increase in on-time performance to increase revenue by Tk.
2,00,000 per year. Sloans contribution margin percentage is 45%.
Required:
(i)
Should Sloan acquire the new system? Show your calculations.
(ii)
Sloan is very confident about the cost savings from fewer lost or damaged cartons as a
result of introducing the new system. Calculate the minimum amount of increase in
revenues needed for Sloan to invest in the new system.
[Marks: 6+(8+6) = 20]
Q. No. 3
(a)
Why dont upper level managers simply dictate transfer prices to divisional managers, and thereby
avoid all the hassles and expense of the negotiations between them (divisional managers)?
(b)
Jason Kemp was torn between conflicting emotions. On the one hand, things were going so well.
He had just completed six months as the assistant financial manager in the electronics division of
considerations Med-Products Ltd. The pay was good, he liked his colleagues and he felt that he
was part of a team that was making a difference in Australian health care. On the other hand, his
latest assignment was causing some sleepless nights. Mel Cravens, his boss, had asked him to
refine the figures on the divisions latest projecta portable imaging device codenamed ZM. The
original estimates called for investment of Tk.15.6 million and projected annual operating profit of
Tk.1.87 million. Med-Products required an ROI of at least 15% for new project approval; so far,
ZMs rate of return was nowhere near that hurdle rate. Mel encouraged him to show increased
sales
Page 59 of 66

Q. No. 3. (Contd.)
and decreased expenses in order to get the projected operating profit above Tk.2.34 million. Jason
asked for a meeting with Mel to voice his concerns.
Jason: Mel, Ive gone over the figures for the new project and cant find any way to get the operating
profit above Tk.1.9 million. The salespeople have given me the most likely revenue figures and
production feels that the expense figures are solid.
Mel: Jason, those figures are just projections. The salespeople dont really know what the revenue will
be. In fact, when I talked with Sue Harris, our manager, she said that sales could range from Tk.1.5
million to Tk.2.5 million. Use the higher figure. Im sure this product will justify our confidence in it.
Jason: I know the range of sales was that broad, but Sue felt that the Tk.2.5 million estimate was pretty
unlikely. She thought that during the first five years or so ZMs sales would stay in the lower end of the
range.
Mel: Again, Sue doesnt know for sure. Shes just estimating. Lets go with the higher estimate. We really
need this product to expand our line and to give our division a chance to qualify for sales-based
bonuses. If ZM sells at all, our revenue will go up and well all share in the bonus pool.
Jason: I dont know, Mel. I feel pretty bad signing off on ROl projections that I have so little confidence
in.
Mel: (frustrated) Look, Jason, just prepare the report. Ill back you up.
Required
(i)
What is the ROl of project ZM based on the initial estimates? What would ROl be if the operating
profit rose to Tk.2.34 million?
(ii)
Do you agree that Jason has an ethical dilemma? Explain your reasoning. Is there any way that Mel
could ethically justify raising the sales estimates and/or lowering expense estimates?
(iii)
What do you think Jason should do? Explain your answer.

[Marks: 5+(4+8+3) = 20]
Q. No. 4.
Jamuna Company manufactures several different products. One of the firms principal products sells for
Tk.20 per unit. The sales manager of Jamuna Company has stated repeatedly that he could sell more
units of this product if they were available. In an attempt to substantiate his claim the sales manager
conducted a market research study last year at a cost of Tk.44,000 to determine the potential demand
for this product. The study indicated that the company could sell 18,000 units of this product annually
for next five years.
The equipment currently in use has a capacity to produce 11,000 units annually. The variable production
costs are Tk.9.00 per unit. The equipment has a book value of Tk.60,000 and remaining useful life of five
years. The salvage value of the equipment is negligible now and will be zero in five years.
A maximum of 20,000 units could be produced annually on the new machinery that can be purchased.
The new equipment costs Tk.300,000 and has an estimated useful life of five years with no salvage value
at the end of five years. Jamuna Companys production manger has estimated that the new equipment
would provide increased production efficiencies that would reduce variable costs to Tk.7.00 per unit.
Page 60 of 66

Q. No. 4. (Contd.)
Jamuna Company uses straight-line depreciation on all of its equipment for tax purposes. The firm is
subject to a 40% tax rate, and its after-tax cost of capital is 16%. The sales manager felt so strongly
about the need for additional capacity that he attempted to prepare an economic justification for the
equipment although this was not one of his responsibilities. His analysis, presented below, disappointed
him because it did not justify acquiring the equipment.
Required Investment
Purchase price of new equipment
Tk.300,000
Disposal of existing equipment:
Loss of disposal
Tk.60,000
Less Tax benefit
24,000
36,000
Cost of market research study
44,000
Total Investment
Tk.380,000
Annual Returns
Increase in contribution margin
Tk.113,000
Less Depreciation
60,000
Increase in before tax income
53,000
Less Income tax
21,200
Increase in income
31,800
Less 16% cost of capital on required additional investment
60,800
Net annual return of proposed investment in new equipment
Tk.(29,000)
Required:
(a) The controller of Jamuna Company plans to prepare a discounted cash flow analysis for this
investment proposal. The controller asked you to prepare corrected calculation of:
(i)
(ii)
The required investment in the new equipment.

The recurring annual cash flows.
(b)
Explain the treatment of each item of your corrected calculations that is treated differently from
the original analysis prepared by the sales manager.
(c)
Calculate the net present value of the proposed investment in the new equipment.
[Marks: (4+6)+6+4 = 20]

Q. No. 5.
Symphony commenced trading on 1 January 2009. It was founded by Mr. Alam Khan, who is the
managing director of Symphony.
The initial aim of Symphony was to provide good quality repairs and servicing to customers with
domestic central heating systems and domestic white goods (white goods are items such as washing
machines, tumble dryers, dishwashers, refrigerators and freezers).
Symphony provides contract services on an annual basis to individual customers who require insurance
covering the repair and servicing of their central heating systems and domestic white goods. Symphony
charges an annual contract fee and undertakes all client repair and servicing requirements without
further charge.
Mr. Khan, who has a very strong background in sales and marketing, recruited engineers who came from
a variety of engineering backgrounds.
Initial growth was prolific with Mr. Khan being very successful in establishing a good sized customer base
within the first two years of the business. He believes that staff utilisation is the key driver of
profitability within Symphony.
Page 61 of 66

Q. No. 5. (Contd.)
Symphony set up a website where clients could access product manuals and other diagnostic data
as well as being able to book an appointment with a service engineer.
The following data is available:
Year
2009
2010
2011
Number of contracted clients
13,000 15,000
14,800
Number of visits to contracted clients
23,400 30,000
32,000
Number of clients gained via recommendation
200
100
5
Number of telephone calls for product support received
52,500 62,000
59,500
Number of telephone calls for product support answered
52,000 60,000
58,000
Number of product support issues resolved by telephone
46,800 51,000
46,400
At the end of 2011, Mr. Khan became anxious regarding the fact that the growth in the customer
base had stopped and that a number of clients had chosen not to renew their contracts with
Symphony. In view of these facts, he undertook an extensive survey of the customers who had
entered into contracts with Symphony since it commenced trading.
Mr. Khan received the following comments which were representative of all other comments that
he received.
Symphony ought to adopt a right first time mentality.
I booked an engineer for last Monday who never arrived but two engineers turned up on Tuesday!
You send me a different engineer each time to inspect my central heating system. Some are here
for an hour and yet others are here for the whole day and some of those even have to come back
the next day.
Your people never seem to have the required parts with them and have to come back the next
day!
An engineer arrived at my home to repair my washing machine but the required parts which were
shipped to my home direct from the manufacturer arrived three days later! Ive heard that Artiste
is the best organization in your service sector and that they provide a much more efficient service
than Symphony and unlike Symphony is always contactable on a twenty-four hours basis during
every day of the year! When I have tried to contact you on Saturdays and Sundays I have often
given up out of sheer frustration!
Mr. Khan also obtained the following data from the Centre for Inter-Firm Comparison.
Symphony
Artiste
Industry average
Customer satisfaction rating (%)
65
92
75
Remedial visits (%) of client visits
8
1
4
Cost per client per visit (Tk.)
150
75
100
Client to staff ratio
250:1
200:1
225:1
Mr. Khan undertook further investigations which revealed remedial visits were frequently due to
staff servicing appliances with which they were not completely familiar.
Required:
Explain how the above-mentioned problems at Symphony could be analyzed and addressed using
the Six Sigma methodology. Your answer should include suggestions regarding additional activities
that should be undertaken in order to improve the performance of Symphony.
[Marks : 20]
= THE END =
Page 62 of 66

SUBJECT: 403. STRATEGIC MANAGEMENT AND ORGANIZATIONAL BEHAVIOUR.
Time: Three hours
Full marks: 100

Answer any THREE questions from Group A and TWO questions from Group B.

All questions carry equal marks.


GROUP A : STRATEGIC MANAGEMENT (TOTAL MARKS-60)
Q. No. 1.
(a) What is strategic Management?
(b) Explain the different levels at which strategies are made or formulated?
(c) Explain the importance of strategic management for an organization.
[Marks: (4+8+8) = 20]
Q. No. 2.
(a) Suppose you are responsible to develop the mission statement of a newly establish soft drinks
company. Which factors you should consider to develop the mission statement. Prepare the draft
of the mission statement.
(b) Explain the differences between Mission and Vision of an organization.
(c) We view business as a means to the material and social wellbeing of the investors, employees
and the society at large, leading to accretion of wealth through financial and moral gains as a part
of the process of the human civilization Critically evaluate this vision statement.
[Marks: (10+5+5) = 20]
Q. No. 3.
(a) What is meant by competitive strategy?
(b) Explain the factors that must be considered for developing competitive strategy.
(c) Explain the competitive strategic model by Michael Porter.
[Marks: (4+8+8) = 20]
Q. No. 4.
(a) What is strategic alliance?
(b) Explain the factors that must be considered for strategic alliance.
(c) How alliances are beneficial for the corporate organizations?
[Marks: (4+12+4) = 20]
Q. No. 5.
Write short notes on the followings:
(a) Balanced Scorecard;
(b) Six sigma;
(c) Outsourcing;
(d) Company value chain.
[Marks: (4 x 5) = 20]
Page 63 of 66

SUBJECT: 403. STRATEGIC MANAGEMENT AND ORGANIZATIONAL BEHAVIOUR.
GROUP B : ORGANIZATIONAL BEHAVIOUR (TOTAL MARKS-40)
Q. No. 6.
(a) Explain the historical evolution of organizational behavior following the sequence of early
practice, the classical era, behavioral era, and contingency perspective.
(b) Millions of workers have lost their jobs due to downsizing. At the same time, many organizations
are complaining that they cannot find qualified people to fill vacancies. How do you explain this
apparent contradiction?
(c) Behavior is generally predictable, so there is no need to formally study Organizational Behavior
Do you agree with the statement? Justify your position with an example.
[Marks: (10+5+5) = 20]
Q. No. 7.
(a) What is personality?
(b) Explain the determinants of personality.
(c) Identify the characteristics of Type A and Type B personality.
[Marks: (4+8+8) = 20]
Q. No. 8.
(a) What is perception?
(b) Explain the factors influencing perception.
(c) Explain halo effect and stereotyping giving examples of each.
[Marks: (4+4+8) = 20]
Q. No. 9.
(a) What is conflict?
(b) Explain functional and dysfunctional conflict.
(c) Explain the five stages in conflict process.
[Marks: (4+8+8) = 20]
= THE END =
Page 64 of 66

SUBJECT: 404.COST AND MANAGEMENT AUDITING
Time: Three hours
Full Marks: 100



PART A : COST AUDITING(MARKS 50)
Q. No. 1.
(a)
A hundred percent export oriented shrimp processing plant has been incurring losses for last five
years. You have been appointed to submit a report to the Board of directors. How you would
examine the matter before giving a report to the management?
(b)
What would be the evidences to be examined by you to support your observations in the cost audit
report of a company with respect to the following:
(i)
Raw material & spare parts which are not moved for one year and above.
(ii)
The process of manufacture.
(iii) Investment in fixed assets.

[Marks: (6+9) = 15]
Q. NO. 2.
(a)
Define audit risk. What are the common areas in pharmaceutical and composite textile industry
which causes audit risk?
(b)
Narrate mathematical model for Risk Based Auditing. How can it help in determining degree of risk
with regard to the test of details as well as in determining the size of the sample?
[Marks: (4+8) = 12]
Q. No. 3.
(a)
What objectives would you set in your mind at the time of framing an Internal Control System of a
Commercial organization?
(b)
What is Internal Control questionnaire? Draft a Questionnaire which you would use for determining
the effectiveness of internal control over payroll of a manufacturing Company.
[Marks: (4+9) = 13]
Q. No. 4.
(a)
What do you understand with the term Conflicts of interest? Describe the term in detail in relation
to the cost audit.
(b)
Define performance audit and efficiency audit. Distinguish between these two with appropriate
example.
[Marks: (5+5) = 10]
Page 65 of 66

SUBJECT: 404.COST AND MANAGEMENT AUDITING
PART B : MANAGEMENT AUDITING(MARKS 50)
Q. No. 5.
(a) Define Management Audit. How it contributes towards good corporate governance?
(b) You have been appointed as a Management Auditor of a large sugar mill. How would you evaluate
the function of purchasing operation?
[Marks: (5+6) = 11]
Q. No. 6.
(a) In Bangladesh, what are the activities normally considered as CSR? What are the demanding areas
which should be incorporated? Justify your answer with appropriate arguments.
(b) What could be the possible reasons and repercussions on the Governments recent decision to fix
the admissible limit of CSR by corporate houses?
[Marks: (7+6) = 13]
Q. No. 7.
(a) Explain Corporate Development Audit, Organization Development Audit and Management
development Audit.
(b) Describe scope of Corporate Development Audit.
(c) What is Corporate Culture? Describe the elements of corporate culture.
[Marks: (5+6+5) = 16]
Q. No. 8.
(a)
What is social accounting? Describe different approaches of social accounting disclosure.
(b) What is environmental audit? What are its objects?
[Marks: (5+5) = 10]
= THE END =
Page 66 of 66

CMA Question of ICMAB-August 2012

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CMA Question of ICMAB-August 2012

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

CMA AUGUST 2012 EXAMINATION

CMA AUGUST 2012 EXAMINATION

The following transactions were completed during June:

CMA AUGUST 2012 EXAMINATION

[Marks: (3+4+8) = 15]

CMA AUGUST 2012 EXAMINATION

The management of ROBINSON CORPORATION is revaluating the appropriateness of using its

Purchase and Sales

Purchases were made quarterly as follows :

Unit cost (Tk.)

Total cost (Tk.)

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

CMA AUGUST, 2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

Full marks: 100

PART-A: BUSINESS MATHEMATICS

For any Three sets A, B, C prove that

Show that sin (1+tan) + cos (1+ cot) = sec + cosec

CMA AUGUST, 2012 EXAMINATION

If y = 2x + 4/x ; Prove that

[Marks: (5+5) = 10]

The Revenue function R in terms of price P.

[Marks: (5+5) = 10]

CMA AUGUST, 2012 EXAMINATION

PART B : BUSINESS STATISTICS

[Marks: (5+5) = 10]

Following data relates to the advertisement expenditure and sales of a firm:

[Marks: (4+6) = 10]

CMA AUGUST, 2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

Full Marks: 100

GROUP-A: BUSINESS ECONOMICS

CMA AUGUST, 2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

CMA AUGUST -2012 EXAMINATION

Required: Prepare a Debtors Account for the month of June-2012.

CMA AUGUST -2012 EXAMINATION

CMA AUGUST -2012 EXAMINATION

CMA AUGUST -2012 EXAMINATION

The following notes are relevant:

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

CMA AUGUST -2012 EXAMINATION

CMA AUGUST -2012 EXAMINATION

CMA AUGUST -2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

Full marks: 100

PART A : MANAGEMENT (TOTAL MARKS-50) *

CMA AUGUST, 2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

Answer any four of the following questions.

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

CMA AUGUST -2012 EXAMINATION

Total Liabilities & stock holders equity

CMA AUGUST -2012 EXAMINATION

Materials will be Tk.180,000 higher than expected.

A savings of Tk.30,000 is expected on operating overhead.

Option 1- contract costs in proportion to estimated contract costs.

Option2- Percentage of the work certified

CMA AUGUST -2012 EXAMINATION

Expenditure Budget Appropriation

CMA AUGUST -2012 EXAMINATION

Additional information is available as follows:

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH