Institute of Chartered Financial Analysts of India (ICFAI) University 2007 Certification Finance Financial Accounting – II (112): - Question Paper

(a)
Nil
(b)
Rs.19,600
(c)
Rs.15,925
(d)
Rs.63,700
(e)
Rs.78,400.
(2 marks)
< ans >
4.
Under which of the subsequent methods, is Goodwill calculated at a discountedvalue of the total amount computed as per purchase method?
(a)
Simple profit method
(b)
Super profit method
(c)
Capitalisation of Super profit method
(d)
Annuity method of super profit
(e)
avg. method.
(1 mark)
< ans >
5.
Goodwill is customarily known as the ‘excess of acquisition cost over netidentifiable assets acquired’ by the acquiring company. Which of the followingconstrues ‘net identifiable assets’?
(a)
Net fixed assets
(b)
Gross fixed assets less depreciation
(c)
Net tangible assets
(d)
Net tangible assets plus net identifiable intangible assets
(e)
Net tangible and intangible identifiable assets and any liabilities presumed by the purchasing company.
(1 mark)
< ans >
6.
Capital employed is equal to
(a)
Gross fixed assets + Current assets
(b)
Gross fixed assets – Depreciation + Current assets
(c)
Gross fixed assets + Current assets – Current liabilities
(d)
Gross fixed assets – Depreciation + Current assets – Current liabilities
(e)
Current assets – Current liabilities.
(1 mark)
< ans >
7.
Under Simple Profit Method, which of the subsequent is/are to be considered tocalculate goodwill of a business?
I. avg. of the adjusted profits of the chosen period.
II. The number of years of purchase.
III. Normal Rate of Earnings.
IV. Capital employed in the business.
(a)
Only (II) above
(b)
Only (I) above
(c)
Both (I) and (II) above
(d)
Both (III) and (IV) above
(e)
(I), (III) and (IV) above.
(1 mark)
< ans >
8.
PPX Ltd. provide the subsequent info about past profits.
Year
Profits (Rs.)
2001-2002
22,000
2002-2003
23,000
2003-2004
24,000
2004-2005
25,000
2005-2006
22,000
On scrutiny, it is obtained that (i) up to 2003-04 the company followed FIFO method of finished stock evaluation thereafter adopted LIFO method, (ii) up to 2004-05 it followed straight-line method of depreciation and thereafter adopted written downvalue method.
provided beneath are the details of stock evaluation.

Earning:   Approval pending.