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

II. Depreciation @ 5% is to be given on furniture & fixtures.
The amount at which the furniture and fixtures is shown in the balance sheet of Brinda Ltd. as on March 31, 2006 was
(a)
Rs.3,10,000
(b)
Rs.2,74,500
(c)
Rs.2,75,500
(d)
Rs.2,77,500
(e)
Rs.2,78,350.
(2 marks)
< ans >
33.
On April 01, 2005, the debit balance of the machinery account of Bright Light Ltd. was Rs.5,67,000. The machinewas purchased on April 01, 2003.The company charged depreciation at the rate of 10% per annum under diminishingbalance method. On October 01, 2005, the company acquired a new machine at a cost of Rs.60,000 and incurredRs.6,000 for installation of the new machine. The company decided to change the system of providing depreciationfrom the diminishing balance method to the straight-line method with retrospective effect from April 01, 2003. The rate of depreciation will remain the identical. The company decided to make necessary adjustments in respect ofdepreciation due to the change in the method in the year 2005-06. The balance outstanding to the debit of machinery account as at March 31, 2006 after effecting the above modifications was
(a)
Rs.5,45,700
(b)
Rs.5,52,700
(c)
Rs.5,46,000
(d)
Rs.5,49,400
(e)
Rs.5,43,000.
(2 marks)
< ans >
34.
The capitalized cost of self constructed equipment does not include
(a)
Materials used
(b)
Wages paid
(c)
Fair share of indirect cost
(d)
Interest on borrowing to finance the above project
(e)
Salary paid to administrative staff.
(1 mark)
< ans >
35.
For petroleum and mining companies which method of depreciation is more appropriate?
(a)
Straight line method
(b)
Diminishing balance method
(c)
Units-of-production method
(d)
Sum-of-the-years’ digit method
(e)
Annuity method.
(1 mark)
< ans >
36.
M/s.Supriya Ltd. purchased a machinery on April 01, 2001 for Rs.1,50,000. It is estimated that the machinery willhave a useful life of five years after which it will have no salvage value. If the company follows sum-of-the-years’-digits method of depreciation, the amount of depreciation to be charged during the year 2005-2006 was
(a)
Rs.50,000
(b)
Rs.40,000
(c)
Rs.30,000
(d)
Rs.20,000
(e)
Rs.10,000.
(2 marks)
< ans >
37.
A new machine costing Rs.1 lakh was purchased by a company to manufacture a special product. Its useful life isestimated to be five years and scrap value at Rs.10,000. The production plan for the next five years using the abovemachine is as follows:

Earning:   Approval pending.