The Institute of Cost and Works Accountants of India 2008 Certification CWA/ICWA Accounting- Test 1 - Question Paper
Paper 2 Accounting Test Paper- I
Time Allowed : 3 hours Full Marks : 100
Answer question one which is compulsory. Answer any five from the rest.
Q. 1.
(a) Give one word or term for the following: (1 x 5 marks)
(i) Commission given for taking over responsibility of bad debts by consignee
(ii) Charges paid on dishonour of a bill of exchange
(iii) Expenses due but not paid
(iv) Costs that vary with output but not in same proportion
(v) Prime cost plus factory overheads
(b) Fill in the blanks (2 x 5 marks)
(i) Excess of__over__is called as deficit in a non-trading
organisation.
(ii) Discount received is recorded on _______ side of the cash book, while
discount given is recorded on the _______ side of it.
(iii) Fixed overheads are charged to cost of production under _______ costing,
whereas only variable costs are considered as product costs under _______
costing.
(iv) Bills payable account is a _______ account and closing stock account is
___account.
(v) Posting from a Purchase return book is made to the debit of _______
account and to the credit of _______ account
(c) State with reasons whether the following statements are true or false (2 x 5 marks)
(i) Errors of omission will not affect Trial balance
(ii) Piece rate method can be adopted in any industry.
(iii) Credit sale of stationery by Bombay Stationery Mart will be recorded in Sales book.
(iv) Fixed cost per unit changes and variable cost per unit is same.
(v) The entry for bill of exchange discounted with the bank is passed in the books of drawee of the bill.
(d) Match the following: (1 x 5 marks)
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1) Conservative principle |
a) Recording transactions at cost |
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2) Accrual concept |
b) Product costs |
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3) Variable costs |
c) Stocks valued at lower of cost or market price |
|
4) Historical cost concept |
d) Recognition of cash & credit transactions |
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5) fixed costs |
e) Two effects of a transaction |
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f) Period costs |
1) Pass necessary journal entries for the following: (2 x 4 marks)
(a) Goods of Rs 1,400 purchased from Ram although entered in purchase book was not recorded in Rams account
(b) Wages paid Rs 45,000 for erection of machinery were debited to Wages account.
(c) Goods supplied by Sujit for Rs 150,000 were entered in Sales book.
(d) Sale of old furniture for Rs 3,500 was recorded to sales book
2) Prepare a bank reconciliation statement from the following details submitted to you by M/s Poonam Trading company as on 31st December 2006: ( 8 Marks)
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Cash Book (bank column only) | ||||||||||||||
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The bank statement revealed the following
Cheques deposited but not cleared by bank Rs 10,000
Interest on securities collected by bank but not recorded in cash book Rs 1,080
Credit transfers not recorded in the cash book Rs 200
Dividend collected by bank Rs 1,000 not recorded in cash book
Cheques issued but not presented for payment Rs 37,400
Interest debited by bank not yet recorded in cash book Rs 1,000
Bank charges debited by bank for the month of December Rs 340
1. The net income based on unadjusted trial balance of Mr. Sengupta, who runs a private school, as on 31st December 2006 stood at Rs 10,875. On investigation of
his books, you understand that the books are kept on cash basis & that following balances has not been considered. Please work out the revised net income of Mr. Sengupta based on the details given below:
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(6 marks) |
2. A company uses three types of raw material in manufacturing of its product X. The following information is given to you in respect of them:
|
Material |
A |
B |
C |
|
Usages per unit of X in kg |
10 |
4 |
6 |
|
Re-order quantity in kg |
10000 |
5000 |
10000 |
|
Price per unit |
10 |
30 |
15 |
|
Delivery period in weeks |
1 to 3 |
3 to 5 |
2 to 4 |
|
Re-order level in kg |
8000 |
4750 | |
|
Minimum level in kg |
2000 |
Weekly production of X varies between 175 to 225 units, averaging 200 units. Find out the quantities of (1) minimum level of A, (2) maximum level of B, (3) Re-order level of C, (4) Average level of C
(2 X 4 marks)
Q. 4.
The following balances are given to you for a sports club:
|
31-03-2005 |
31-03-2006 | |
|
Fixed Assets |
110000 |
99000 |
|
Bank |
12500 |
15300 |
|
Cash |
1500 |
2500 |
|
Prepaid Insurance |
2000 | |
|
Subscription received in advance |
45000 |
30000 |
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Interest on outstanding loan |
1250 | |
|
Loan |
100000 | |
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Outstanding expenses: | ||
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Water |
2350 |
1750 |
|
Electricity |
2500 |
3500 |
|
Wages |
12500 |
7500 |
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Repairs |
1500 |
1200 |
|
Subscription receivable |
75000 |
67000 |
|
Receipts |
Rs |
Payments |
Rs |
|
Opening balance: Bank Cash |
12500 1500 | ||
|
Subscriptions |
225000 |
Loan repaid |
100000 |
|
Donations |
45000 |
Rent |
15000 |
|
Miscellaneous |
7500 |
Water |
22750 |
|
Electricity |
36000 | ||
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Wages |
48500 | ||
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Repairs |
17800 | ||
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Telephone |
22500 | ||
|
Interest on Loan |
2500 | ||
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Insurance |
7500 | ||
|
Miscellaneous expenses |
1150 | ||
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Closing Balance Bank Cash |
15300 2500 |
Prepare Income & Expenditure a/c for the year ended 31-03-2006 and the Balance Sheet as on that date. Donations are to be capitalized. (14 marks)
A manufacturing company has three production departments X, Y, and Z and two service departments A and B. The following estimates are given to you for the quarter ended 30th Sept 2007.
|
Rent and Rates |
Rs |
10000 |
|
Lighting and electricity |
Rs |
1200 |
|
Indirect wages |
Rs |
3000 |
|
Power |
Rs |
3000 |
|
Depreciation on machinery |
Rs |
20000 |
|
Other expenses and sundries |
Rs |
20000 |
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Following are further details: | ||||||||||||||||||||||||||||||||||||||||||
|
|
X |
Y |
Z |
A |
B | |
|
A |
20% |
30% |
40% |
- |
10% |
|
B |
40% |
20% |
30% |
10% |
- |
Calculate the overhead absorption rate per hour in respect of the three departments. What will be the total cost of the job with material cost of Rs 80 and direct labour cost of Rs 40 which passes through X, Y, & Z for 2, 3 and 4 hours respectively? (14 marks)
Q. 6.
(a)
On 1st April 2007, Mohan of Mumbai consigned 400 packets of Tooth powder bottles to Mr. Sohan of Kolkata. Each packet contained 100 bottles. Cost price of each packet is Rs 300. Mohan spent Rs 50 per packet as cartage, freight, insurance & forwarding charges. One packet was lost on the way and Mohan lodged a claim with the insurance company & could get Rs 270/- Sohan took delivery of the rest of the material and spent Rs 19950/- as storage and Rs 9975 as Octroi & freight. He sold 320 packets for cash and 50 packets on credit at Rs 650 per packet. He was entitled to a commission of 3% on sales plus 1% Del credere commission on credit sales. Sohan remitted Rs 200000 by bank draft on 30th June
2007.
Prepare consignment account and Sohans a/c in the books of Mr. Mohan. (7 marks)
(b)
The following details have been extracted from the books of a manufacturing company for the half year ended 30th September 2006:
|
Amount Rs | |
|
Purchase of raw material |
132000 |
|
Direct wages |
110000 |
|
Rent, rates, insurance |
44000 |
|
Carriage inward |
1584 |
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Stock 1-4-2006: | |
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Raw material |
22000 |
|
Finished goods (1600 tonnes) |
17600 |
|
WIP |
5280 |
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Stock 30-09-2006: | |
|
Raw material |
24464 |
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Finished goods (3200 tonnes) |
35200 |
|
WIP |
17600 |
|
Factory supervision |
8800 |
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Sale of finished goods |
330000 |
Selling costs were Rs 0.75 per tonne for 25600 tonnes sold during the period.
Calculate prime cost, factory cost, cost of sales, profit and no of tonnes produced.
(7 marks)
produces a single product sells it at Rs 50 per unit. The variable cost per unit
I the fixed costs are Rs 12 lacs per annum. Please calculate:
P/V ratio and break even sales
(i)
(ii)
(iii)
(iv)
New breakeven if variable costs increase by Rs 3 per unit, without increase in selling price.
Increase in sales required if profits are to be increased by Rs 240000 Quantum of advertising expenditure permissible to increase sales by Rs 120000 without affecting the existing profit quantum.
All the events are independent of each other. (2X4 marks)
(b)
Following particulars are taken from the books of Supreme industries:
|
Time allowed for the job Time taken for the job |
15 hours 15 hours 15 hours 15 hours 12 hours 9 hours |
The hourly rate payable as normal wages is Rs 2 per hour. Compute the total wages as per Halsey plan (50% sharing) and Rowan plan. What is your recommendation if the time taken is going to be 6 hours after 3 months? (6marks)
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Attachment: |
| Earning: Approval pending. |
