Institute of Chartered Financial Analysts of India (ICFAI) University 2007 Certification Finance Financial Accounting (CFA510): - Question Paper

(c) Both (I) and (II) above
(d) Both (III) and (IV) above
(e) (I), (III) and (IV) above.
52. An asset can be depreciated at 10% p.a. under the straight line method or at 25% p.a. under the written
down value method. The straight line method will provide higher amounts of depreciation from the
(2 marks)
(a) 4th year
(b) 5th year
(c) 6th year
(d) 7th year
(e) 8th year.
< ans >
53. Which of the subsequent is the accurate response to indicate the impact of new capital introduced on
assets, owner’s equity and total liabilities of a firm?
(1 mark)
Assets Owner’s equity Total Liabilities
(a) Increase Increase reduce
(b) reduce Increase No effect
(c) Increase Increase Increase
(d) No effect Increase reduce
(e) reduce Increase reduce.
< ans >
54. The balance in the accumulated depreciation account of Vali Ltd. as on April 01, 2006 was Rs.2,00,000,
when the original cost of the assets amounted to Rs.10,00,000. The company charges 10% depreciation
on a straight line basis. 1 such asset costing Rs.5,00,000 (accumulated depreciation of Rs.80,000)
was disposed off at the beginning of the year. The balance of the accumulated depreciation account as
on March 31, 2007 was
(2 marks)
(a) Rs.2,20,400
(b) Rs.1,70,000
(c) Rs.1,20,000
(d) Rs.2,50,000
(e) Rs.1,75,000.
< ans >
55. Mr. Nair commenced his business on April 01, 2006 with a capital of Rs.57,000. The break-up of his
capital includes cash amounting to Rs.40,000. All his transactions are on cash basis only. He purchased
stock worth Rs.25,000. He paid for miscellaneous expenses of Rs.2,700. During the year he withdrew
Rs.450 per month for his personal use. The depreciation for the year was estimated at Rs.3,500 and
other expenses Rs.1,700. If the sales made during the year was Rs.32,000, cash balance as on March 31,
2007 was
(2 marks)
(a) Rs.32,450
(b) Rs.37,200
(c) Rs.33,700
(d) Rs.37,300
(e) Rs.32,700.
< ans >
56. Alpha Ltd. agreed to purchase Beta Ltd. on April 1, 2007. Net profits of Beta Ltd. for the last 5 years

Earning:   Approval pending.