Institute of Chartered Financial Analysts of India (ICFAI) University 2007 Certification Finance Financial Accounting – I (111) : - Question Paper

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40.
ans : (c)
cause : r = (C -S) x100 nC× where C is the original cost of the machine’s is the scrap value and n the useful life in years.
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41.
ans : (d)
cause : Let the rate of depreciation = x
The depreciated value of machine = Rs.1,20,000 (1 – 3x) = Rs.66,000
1 – 3x = 000,20,1.Rs000,66.Rs= 0.55
3x = one – 0.55 = 0.45
x = 0.45 ÷ three = 0.15 or 15%.
Thus, the rate of depreciation = 15%.
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42.
ans : (a)
cause :
Period
Sales (Rs.)
April 01, 2005 to August 31,2005 (Rs.2,10,000-Rs. 40,000)
1,70,000
September 01, 2005 to February 28, 2006
2,75,000
March 01, 2006 to March 31, 2006
75,000
Total sales for 2005-2006
5,20,000
Royalty (Rs.5.20,000 x 20%) for the year 2005-2006
1,04,000
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43.
ans : (d)
cause : Revenues should be recognized when they are realized or realizable and earned (d). They are realized when the goods or services or using rights are exchanged for cash or claims to cash. The other options are incorrect because the revenue should be recognized only when it is realized or realizable and earned
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44.
ans : (d)
cause : The uncovered shortworkings after the expiration of the stipulated period is to be written off by debiting profit & loss account, because it is a loss. It cannot be debited to minimum rent account, landlord a/c., royalty account or bank account. Hence, (d) is actual.
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45.
ans : (c)
cause : Short workings for the 1st year is minimum royalty paid less true royalty payable
Rs.25,000 – (Rs.20,000 × 1) = Rs.5000.Royalty payable in the 2nd year is Rs.35,000 less short working Rs.5,000.
= Rs.30,000
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46.
ans : (b)
cause : Analysis of Royalties Payable
Year
Output (Tonnes)
true Royalties
Minimum Rent
Excess Working
Shortworkings
Amount Payable
Suffered
Recouped
Written – off
C/F
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
Rs.
2000-2001
600
36,000
80,000
-
44,000
-
-
44,000
80,000
2001-2002
1,250
75,000
80,000
-
5,000
-
-
49,000
80,000
2002-2003
1,500
90,000
80,000
10,000
-
10,000
-
39,000
80,000
2003-2004
1,800
1,08,000
80,000
28,000
-
28,000
6,000
5,000
80,000
2004-2005
800
48,000
*72,000
-
*24,000
-
5,000
24,000
72,000
2005-2006
1,600
96,000
80,000
16,000
-
16,000
-
8,000
80,000
The amount of short workings recouped during the year 2005-2006 was Rs.16,000.

Earning:   Approval pending.