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

Year one 5,000 units
Year two 10,000 units
Year three 12,000 units
Year four 20,000 units
Year five 25,000 units.
The depreciation expenditure for the third year under units-of-production method will be
(a)
Rs.16,667
(b)
Rs.15,000
(c)
Rs.20,000
(d)
Rs.18,000
(e)
Rs.19,000.
(2 marks)
< ans >
38.
According to Accounting Standard –6 depreciation is to be given on the basis of
(a)
Historical cost of the asset
(b)
Market price of the asset
(c)
Replacement cost of the asset
(d)
Realizable value of the asset
(e)
Revenue arising from hire purchase.
(1 mark)
< ans >
39.
When a fixed asset is acquired in exchange of a different asset its cost is usually determined by reference to the
(a)
Net book value of the asset provided up
(b)
Gross book value of the asset provided up
(c)
Net book value of the asset acquired
(d)
Gross book value of the asset acquired
(e)
Realizable value of the asset provided up.
(1 mark)
< ans >
40.
The rate of depreciation in case of straight line method, where
P = Market value of the asset.
r = Rate of depreciation.
R = Amount of depreciation for the accounting period.
S = Scrap value of the asset.
C = Original cost of the asset.
N = Useful life of the asset.
(a)
r = R × 100
(b)
r =
(c)
r =
(d)
r =
(e)
r = ×100.
(1 mark)
< ans >
41.
The cost price of a machine is Rs.1,20,000 and the depreciated value of the machine after three years will be Rs.66,000. If
the company charges depreciation under straight line method, the rate of depreciation will be
(a)
25%
(b)
20%
(c)
18%
(d)
15%
(e)
12%.
(1 mark)
< ans >
42.
Ms. Sujana owns a coal mine which is leased to Mr.Prajay at a royalty of 20% of sales subject to a minimum rent ofRs.1,00,000 per annum. The royalty is payable on April 30 for the coal sold during September 01 to February 28/29 every year and on October 31 for the coal sold during March 01 to August 31 every year.
Details of sales are as under:
Period
Sales (Rs.)
September 01, 2004 to February 28, 2005
1,90,000
March 01, 2005 to March 31, 2005
40,000
March 01, 2005 to August 31, 2005
2,10,000
September 01, 2005 to February 28, 2006
2,75,000
March 01, 2006 to March 31, 2006
75,000
The amount which Ms. Sujana should record as revenue from royalty for the year 2005-2006 was
(a)
Rs.1,04,000
(b)
Rs.2,75,000
(c)
Rs.1,12,000
(d)
Rs.1,00,000

Earning:   Approval pending.