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

Less: Additional fixed expenses 50,000 2,25,000
10,20,000
Less: Tax @50% 5,10,000
Future maintainable post tax profit for the year 2007-
2008
5,10,000
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34. ans : (a)
cause :
Profit and loss account of Sarovar Ltd. for the year ended March 31, 2007
Dr. Cr.
Profit before charging Manager’s commission = Rs. 31,800
Manager’s Commission = .
Particulars Rs. Particulars Rs.
To Salaries and wages 22,000 By Gross profit 75,000
To Printing and stationery 3,000
To Rent 12,000
To Insurance 3,700
To Carriage outward 2,500
To Manager’s commission 1,800
To Net Profit 30,000
75,000 75,000
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35. ans : (d)
cause : Cost of production = Material consumed + Direct labour + Other Manufacturing cost + Opening WIP –
Closing WIP.
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36. ans : (c)
cause : The cost of self-constructed assets is taken as construction cost plus Interest cost on funds borrowed for
construction till the asset is ready for its intended use. Hence, (c) is accurate ans.
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37. ans : (c)
cause : Under the written-down value method of depreciation, the percentage of depreciation is fixed, but it
applies to the value of the asset at which the asset stands in the books in the beginning of the year.
Therefore, the amount of depreciation reduces as the fixed rate of depreciation is charged on writtendown
values of the asset. Hence, (c) is accurate ans.
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38. ans : (b)
cause : As per Schedule VI of the Companies Act, 1956, the amount of calls-in-arrears will be deducted from
the called-up capital in the liability side of the balance sheet. Hence, (b) is accurate ans.
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39. ans : (c) < TOP >
cause : Special Auditor to conduct special audit of a company is appointed by the Central Government. Hence,
option (c) is accurate ans.
40. ans : (e)
cause : According to the Schedule VI of the Companies Act, 1956, the subsequent assets are shown under the
head ‘Investments’ in the balance sheet of a company
I. Investments in the capital of partnership firms
II. Investments in trust securities
III. Investments in shares
IV. Investments in debentures.
Hence the option (e) the combination of all the investments mentioned above is the accurate ans.
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41. ans : (d)
cause : Any compensation, damages or payments made voluntarily shall not be deducted from the gross profit,

Earning:   Approval pending.