> eee 6 C.U,M. Com. Question Papers [ Part-1]—2019 wate’. (i) White Squire poses latent threat to the targe . “er olathe time of coc reive tender offer from an umreoon! bidder. (iii) A standstill agreement might be included to prevent the greenmailer fom making other takeover efforts. (iv) A target firm may counteroffer the bidder in a PacMandefense which is a very popular defense strategy. . (+1434 COMMERCE PAPER: 2.5-2019 (Strategic Cost and Management Accounting) Fuli Marks : 40 Group-A Answer any two questions. 1. (a) Mention the factors which you would consider for application of Activity-based Costing (ABC) System ina manufacturing organisation. (b) A firm manufactures two products - P & Q, using the same manufacturing facilities. Consider the following information for a:particular period and determine cost of production per unit of the products using both Conventional System and ABC System. ; Pp Oo Output (units) 1000. 5000 Raw Materials per unit (2) 0) - 0 Direct Wages (?) 20 30 Machine Hours per unit 3 2 Machine Set up (Nos.) . 10 20 dnspection Hours 15 3 Total production overhead incurred during the period - Z 39,000 Analysis of production overhead shows that : Machine related costs - 226.000 Set-up related costs - 27,500 Inspection related costs - —& 5,500. 24(3+5) 2. (a) State the prerequisites for application of Market Price based ‘Lrapsfer Pricing System. . “(b) Y Ltd. has two divisions- D, and D,. Operating at full capacity D, ‘can manufacture }000 unit and 1500 units per month respectively of its two components - M and N. 1), can sell entire production of component M and only 1000 units of component N in the external market. Flowever-Paper : 2.5 2919 "7 De pied vo its of N for manufacture of its product X. Considering 1 ig er information, determine the minimum transfer price per tnt that D, should charge for transfer of N to D, and also show the monthly operating income of D, at its full Capacity, if 1000 units of Tred to D, at minimum transfer Price. M N z z Raw Materials per unit 2 30 Direct Wages per unit 15 20 Variable Overhead per unit 10 1s Fixed Overhead per unit 5 tor Market Price per unit 0 90 2+(3+5) 3. (a) Though Residual Income (RI) and Economic Value Added (EVA) we conceptually same, there are many differences between the two. Do you agree? Justify your answer mentioning the similarities and lissimilarities between RI and EVA. (b) Consider the following information and calculaté ROI and EVA of \ Ltd. assuming that there are no other non-current liabilities. Shareholders Equity — z 5,00,000 10% Debentures — = 5 00,000 Curren Liabilities — 2,00,000 Current Assets — z 3,00,000 Profit after Tax — % 2,45,000 Risk free rate of return —6% Market rate of return— 12% Beta value relating to the company — 0.9 Corporate income tax rate — 30%. 3+(3+4) 4. (a) What is a Balanced Scorecard? Briefly tate the interrelationship hong different perspectives of a Balanced Scorecard. : (b) What do you mean by Responsibility Accounting? Mention the ‘ps to be followed for implementing Responsibility Accounting System ‘an organisation. (2+3)4(2+3) °U.M. Com. Question Papers { Part-II]—2019—2 =18 C.U.M. Com, Question Papers [ Part-I1]—2019 Group-B Answer any two questions, 5. (a) Explain the concept of ‘relevant costs’ in the context of relevan cost analysis. ) A manufacturing company pro sold in the domestic market at @ 80 per unit. The present product sales is 15.000 units representing 60% of the capacity available. Cost details of the product are as under.: Direct matenal Cost~ = 3,75,000 Direct | abour Cost —& 1,50,000 Variable Overhead — 50% or direct Labour Cost Fixed Overhead — & 3,50,000 The company wants to increase capacity utilisation and is the following options : (i) Accept an export order that would utilise 50% of the capac ity ofthe nin full and excuted at 10% below the factory. The order has to be taker normal domestic prices or rejected totally. Additional variable cost of 25 per unit towards export packing, duties etc are to be incurred. (ii) Introduce anew produc ‘Y’ that would utilise 10% of the existing capacity Details of the new product are as follows : Selling price per unit— % 350° Direct material cost per unit- © 90 Direct wages cost per unit — © 80 (= 16 per hour) Variable overhead — 50% of direct wages Additional specifi fixed cost - % 12 per hour. Evaluate the above two options and suggest the best combin! that would maxim ise profit of the company. 6. Acompany manufacture three products A,, A, and A, the current of sales of A,, A, and A, is in the ratio of 3:4.1 respectively: Company's estimation for the next budget period are as under : examining duces a single product ‘x’ which is tion and ation 24819 :2.5 —2019 A, A; A, Daag! Selling price par unit (t) IR ae & ™aterial consumption per unit Skg _5kg hours allowed per unit 5 4 — Budgerg Tial cost < 12 per kg = = ~ ges rate = 8 per hour = — ~ Budgeted va, nable overhead z 20 perunit - - 7 ertime Premium is 50% and is payable ifa worker works for more than 49 hours in a week. Number of direct worker is 90. There are eight Weeks consisting of 5 days per week available in the budget period. The fixed overhead for the budget period is expected to be 3,00,000 and the company desires a Profit of & 2,04,000 forthe same period. It is assumed that the Production and ‘Sales will occur evenly throughout the budget period. Anticipated stock for the budget period : . A, A, A, Raw material Qpening: 1020units 2000 units 500 units 8000 kg Closing: 10 day’s sale 10.day’s sale 10 day’ssalc 10 day’s €onsumption - Prepare : (i) Sales budget in quantities and value, | (ii) Production budget, " A (iii) Raw meterial purchase budget in quantities and value, y i? Wages budget. ; 10 -(@) From the following information, compute tifsales value variance ‘sales price variance; and (iii) sales volume variance : a20 C.U.M. Com. Question Papers [ Part-I1]—2019 Budgeted Quantity Budgeted price] Actual Quantity oro per unit (2) Cn EE ee for the last month using standard costing system You as a management accountant are intending to decide as to whether this variance may be investigated. The cost of investigation is ¢ 20,000. The cost of the process per period being out of control is ¢ 24,000 and the cost of corrections if out of control process is explored is & 16,000. The probability that the process is out of control is 0.10. You believe that if this variance is not investigated and the process is out of control, the cost of allowing the process to remain out of control is % 50,000. You are required to (i) calculate the expected costs of investigating the process and of not investigating the process; (ii) suggest the company about the decision to investigate based on cost-benefit analysis’. 64 8. Write short notes on the following : (a) Cost Reduction (b) Performance Budget (c) Budget Manual. 3+4+3 COMMERCE- PAPER: 2.6—2019 (Auditing and Assurance Service) Full Marks : 40 Moduke-I Answer any two questions. 1. (a) Why auditing is regarded as critical aspect of accounting? 3 (b) “Social audit creates impact upon governance.”— In light of the statement discuss the needs and objectives of social auddit. 3+4 Or, “Philosophy of auditing is time-tested and proven in practice.”— Discuss. 2. (a) What do you mean by Standards on Auditing (SA)? (b) Discus: the scope and importance of standards on auditing in contempora accounting environment. 24345a —————— — Paper :2.6 —2019 vn 3. (a) Under what circumstances an auditor will not able to XPress an walified opinion in his report ? (b) Discuss the different situations when ‘adverse opinion’ and ‘disclaimer of opinion’ are expressed by an suditor. (C) What do you mean by ‘auditreports and certificates for special purposes’? 24642 4, Write explanatory notes on (any two) : 8 } (a) Doing statutory audit is full of risk. (b) Internal check is a part of | internal contro] system. (c) Independence of, auditor is a mere myth or an ’ ynreal phenomenon. ‘ : Module r Answer any two questions. * 5, (a) Explain the procedure of ‘Cost Audit’ as per Rule-6 of the Companies (Cost Records and Audit) Rules, 2014. (b) “Operational audit is considered as a specialised management information tool to fill the void that conventional information sources fail to fill.”- Point out any four shortcomings of the conventional sources of management information. (c) Who can conduct an ‘Environmental Audit’? 44442 6. (a) “There are certain impact of changes on Business Process due 3 to shifting from manual to electronic medium ...”"- In this background briefly mention the ‘Primary Changes’ in the business process. (b) “Application controls are specific controls unique to each computerised programs ...”— Mention the different types of ‘Application Control for information system. (c) Write a short note on ‘White Box Approach of Auditing’. 44343 3 7.(a) Explain in brief the fundamentals principles of the professional accountants, (b) Define the term ‘Professional Misconduct’. (c) Mr. X, a _ Chartered Accountant wrote several letters to Government Department, = Pointing out seniority of his firm, sending hislife sketch and stating that he had a glorious record of service to the country as well as to the ration of accountancy profession with a view to get the Audit ») Discuss whether the action by the Chartered Accountant would ‘Mount to misconduct or not. 44244 ss2 C.U.M. Com. Question Papers [ Part-I1]—2019 8. (a) “The audit of government expenditure is one of the major component of Government Audit"—Briefly explain the ‘Audit against Rules and Orders’ and ‘Propriety Audit’. in respect to audit of government expenditure. (b) Mention the objectives of ‘Environmental Audit’, both at national level and corporate level. (c) Point out the regulatory provision Telating to audit of Non-Governmental Organisation (NGOs). 5+3+2 COMMERCE- PAPER: 2.7 —2019 coC.U.M . C I . QUESTION PAPERS [| PART-II ]—2019 NEW SYLLABUS: COMMERCE—2019 (Strategic Management) Fun Marks: 40 Module-1 . Answer aity two questions. St 1. (a) ‘The first Step to building superior Fesponsiveness to customers ¢ customer’. Explain, (b) What are the factors that make ore Competence Jifficult for the Competitors to imitate? (c) Define Critical uccess Factors, 2. (a) In the Context of Porter's Five ight of exit barriers’ ang ‘ind valry among established firms inlrew Grove, the Forces Framework, how do the lustry competitive structure’ influence ? (b) Explain the sixth force given by former CEO of Intel. 3. (a) How do “capabilit fect the durability of comp the strategic hoices of a differentiator? GH 4.€) What are the limitations Of Industry Life Cycle Model? (b) Explain ‘chnological core conipetence. $45 Module-11 . «Answer any two-questions, 5. (a) Briefly explain the concept of “corporate Parent™ by means ofa uitable diagram. (b) How might a corporate Parent engage jn, Value- tstroying activities? (c) What is a Parenting matrix? Indicate its role in . "Mulating corporate strategy, (2+2)-24@2495 6, Distinguish between : . . (a) Strategy as pattem and Strategy as position. (b) V etenti; 6t4 'y of competitors’ and “industry dynamism’ etitive advantage? (b) What are al falue creat al of the portfolio thanager and that of the Syhergy manager jn ™s of eny isioning activities as well as central services, (c) Strategic “Mulation and strategic implementation. (d) Strategic control-and ‘rational control. -U.M. Com. Question Papers [ Part-II] 2019-1 .2. C.U.M. Com. Question Papers [ Part—II]}—2019 7. Examine the appropriateness of the following statements - Wg (a)A customer-centred vision statement is forward looking, (b) A strategic leader is solely involved in strategic enactment. (c) Strate evaluation activities show that corrective action is always Necessary in the strategic management process. (d) An intended Strategy is always ; realised strategy. 8. Write short notes an (any twa) : 5. ; (a) Level-5 leadership (b) Barriers to strategy execution (c) Types, strategic control. COMMERCE-_PAPER -22-2019rT a Paper : 2.82019 a offer annual interest Payment @ 7% P.a, on 31st March each year. The ponds were Issued at their face value and each bond can be converted into one ordinary share in A Ltd. at any time in its lifetime. Companies in similar risk Glass issued debt with similar terms but without the convertibility option at arate of 9% p.a, You are required to : (i) Pass the journal entry on initial recognition after necessary calculation. (ii) Provide the accountmg entries on 31.03.2019 if 80% of the bondholders decide to convert their bonds“into equity shares on that date. . : [Given, PVIF (9%, 6)= 0.5962: PVIFA (9%, 6) = 4.4859] 2+(2+6) 8. What do you mean by Integrated Report? State the objectives of Integrated Reporting. Describe, in brief, the content elements of an Integrated Report. : 2+2+6 COMMERCE-PAPER:2.8-2019 (Financial Statement Analysis) Full Marks : 40 Module-I Answer any two questions. . 1. (a) Distinguish between traditional approach and modem approach of financial statement analysis. : (b) Recast the following information as a multi-step income statement, conduct a Y;0-Y change analysis and interpret the results obtained. Net Sales Cost of Goods Sold Other Operating Expenses: Finance Costs Net Income Year ending 31st MarchB C.U. M. Com. Question Papers [ Part-I1]}—2019 2. Given the following composition of capital structure of AB Leg, a on 31.03.2018- * 2,00,000 outstanding shares of common stock of face value z jp each. * 10,000 outstanding 10% cumulative preference shares of ¢ 100 face value, * Employee stock options to purchase 50,000 shares @ % 220 per share. The following changes in capital structure of AB Ltd. occurred daring FY 18-19 inthe beginning of respective months — * In July 2018, the company issued bonus shares in the ratio of 3: 4 shares held to the common stockholders existing as on record date in end June 2018, + In August 2018, the company issued % 20,00,000 12% convertible debentures at par value of z 100, convertible into 50,000 shares of ‘common stock. . + In January 2019, the company bought back 50,000 equity shares from open market at an average price of = 210 per share. Additional information available from the books of AB Ltd. — (i) Net Income for FY 18-19 is 2 20,00,000, (ii) Tax rate applicable to the firm —20%, (iii) Arrear Preferred Dividend for FY 17-18 is z 1,00,000. (iv) Average market price of common Stock during the year is z 250 per share. Compute Basic EPS and Diluted EPS resul; ined. (b) Havells Ltd. has 50,000 euros worth debts outstanding at Brussels. _ The. amount is likely to be received in 3 months. It is given that spot ~ EURINR 59.0710. The three month forward rate is EURINR 59.4280. The expected euro rate in 3 months in EURINR 59.40. What is the rate applicable if Havells Ltd. wishes to hedge? What is the receipt of Havells India if , they go for forward cover? If Havells go for forward contract and the Brussels counterparty fails to make payment, what is the net loss/gain to Havells Ltd.? * (c) IBM Co. is a U.S. firm. It ha subsidiary in India that produces j computer chips and sells them to European countries. The chips are invoiced in dollars. The subsidiary pays wages, rent and other operating costs in India’s currency (rupee). Every month the subsidiary remits a , large amount of earnings to the U.S. parent. This is the only international business that IBM Co. has. The subsidiary wants to borrow funds to \ expand its facilities, and can borrow dollars at 9 per cent annually or can borrow rupee at 9 per cent annua’ly, Which currency should parent tell the subsidiary to borrow, if the parent’s main goal is to minimize exchange rate risk? Explain. cs 4+(1414+ 24424 Module-II Answer any two questions. 5. (a) “There are several reasons as to why many countries have adopted Arm’s Length Principle (ALP).”- Mention any two significances * of ALP. z ? —_(b) Point out any three problems faced while using ‘Safe Harbour’, (c) X Ltd., a Japanese company has a subsidiary, Y Ltd.’ in India, x “Ooo aS BD36 C.U. M. Com. Question Papers [ Part-II] 2019 - Ltd. sells computer monitors to Y Ltd., for resale in India. X Ltd. also se), computer to Z Ltd., another computer reseller. It sells 1,00,000 compu, > monitor to Y Ltd. at & 22,000 per unit. The price fixed for Z Ltd. is z 20,009 per unit. The warranty in case of sale of monitors by Y Ltd. is handled Y Ltd. However, for sale of monitor by 7 Ltd., X Ltd. is responsible for the warranty for 4 months. Both X Ltd. and ¥ btd. offer extended warranty a a standard rate of = 3,000 per annum. (i) In this situation which method will be applied for determining arm’s length transfer price and why? (ii) How the assessment is going to be affected? 2+3+(243) 6. (a) “The basic justification of tax neutrality is economic efficiency,” — Justify the statement. . (b) Mention the ‘Type of Tax Haven Country’ for the following countries and also give the logic behind your answer : (i) Cayman Island (ii) Hongkong. (c) Write a short note on ‘UN Model of Double Taxation’. (d) What is meant by ‘Base Erosion Profit Sharing (BEPS),? (e) Briefly define the concept of ‘Permanent Establishment’ in respect to DTAA. . : 242424242 7. (a) “Even after several forecast of imminent death, the Eurobond market survives and thrives.” — What are the rationales for existence of Eurobond market? wu : (b) “The critical error made by the MNCs are to ignore competitor - behaviour and assume that the base case is status quo.” — In this context explain with example, the importance of ‘getting the base case right’ for the MNCs in capital budgeting decision. (c) On January 01, 2019, the Italian telecom authority expropriated a _Network service provider owned by ABC Ltd., an American operator of foreign telecom facility. In compensation, a perpetuity of $ 100 million will be paid annually at the end of each year. ABC Ltd. believes, however, that the Italian Central Bank may block currency repatriations during the calendar year 2021, allowing only 70% of each year’s payment to be repatriated (and no repatriation of investment from other 30%). Assuming a cost of capital of 25% and a probability of currency blockage of 40%,Paper :2.10-—2019 37 what is the current value (on January 01,2019) of Italy’s compensation? 343+4 8.(a) Differentiate between ‘Anglo-Saxon Model’ of financial system | and ‘Continental European and Japanese’ type of financial system. (b) Define the term ‘Securitization’, (c) What is“ Yankee Bond’? (d) Wine a short note on ‘Global Financial Centre Index’. (e) “By operating in Eur ocurrencies, banks and suppliers of funds are able to avoid certain: regulatory costs and restriction that would otherwise be imposed.” — Mention any.two of the ‘regulatory costs and restr iction’. 342414242 COMMERCE PAPER “3.10-2019