ICMA Questions Dec 2012

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA DECEMBER 2012 EXAMINATION

FOUNDATION LEVEL
SUBJECT: 001. PRINCIPLES OF ACCOUNTING
Time: Three hours
Full Marks: 100

All questions are to be attempted.

Show computations, where necessary.

Answer must be brief, relevant, neat and clean.

Start answering each question from a fresh sheet.
Q. No. 1.
(a) Mr. Z believes revenues from credit sales may be earned before they are collected in each. Do you agree?
Explain.
(b) Store equipment was purchased for Tk. 1500. Instead of debiting the Store Equipment account, the debit was
made to Delivery Equipment. Of what help will the trial balance be in locating this error? Why?
(c)
Sonali Enterprises had a capital balance of $ 3,16,000 at the beginning of the period. At the end of the
accounting period, the capital balance was $ 3,96,000.
1.
Assuming no additional investment or withdrawals during the period, what is the net income for the
period?
2.
Assuming an additional investment of $ 26,000 but no withdrawals during the period, what is the net
income for the period?
(d) Platinum Corporation opened a business on August 1. On August 31, the balance sheet showed cash $
18,000, Accounts Receivable $ 3,400, Supplies $ 1,200, Office Equipment $ 12,000, Accounts Payable $ 7,200
and Platinum Corporation, Capital, $ 27,400. During September the following transactions occurred:
1.
Paid $ 6,200 cash on accounts payable.
2.
Collected $ 2,600 of accounts receivable.
3.
Purchased additional office equipment for $ 4,200, paying $ 1,600 in cash and the balance on account.
4.
Earned fees of $ 11,800, of which $ 5,000 is paid in cash and the balance is due in October.
5.
Withdrew $ 1,200 cash for personal use.
6.
Paid salaries $ 11,400, rent for September $ 1,800, and advertising expenses $ 200.
7.
Incurred utility expenses for the month on account is $ 340.
8.
Received $ 14,000 from Hindustan Bank-money borrowed on a note payable.
Required:
Prepare a tabular analysis of the September transactions with August 31, balances. The column headings should be:
Cash + Accounts Receivable + Supplies + Office Equipment = Notes Payable + Accounts Payable + Platinum
Capital .
[Marks: (2+3+5+10) = 20]
Q. No. 2.
(a) What is the meaning of taking a physical inventory?
(b) The selection of an inventory cost flow method is a decision made by accountants Do you agree? Explain.
(c)
National Star Company accounts for its inventory using the LIFO method under periodic inventory procedure.
Purchases, Sales and inventory data for the year ended December 31, 2011, are:
Merchandise inventory
January 1
4,000 units
@ $ 40.00
Purchases:
January 7
10,000 units
@ 48.00
July 7
20,000 units
@ 56.00
December 21 12,000 units
@ 64.00
During 2011, 32,000 units were sold for $ 25,60,000, leaving an inventory on December 31, 2011, of 14,000
units.
Required:
(1) Compute the gross margin earned on sales during 2011.
(2) Compute the change in gross margin that would have resulted if the purchase of December 21 had been
delayed until January 6, 2012.
(3) Recompute the gross margin assuming that 18,000 units rather than 12.000 units were purchased on December
21, at the same cost per unit.
(4) Solve parts 1, 2, and 3 using FIFO method.
[Marks: (2+3+15) = 20]
Page 1 of 55

FOUNDATION LEVEL
Q. No. 3.
(a) When the total cash inflows exceed the total cash outflows in the statement of cash flows, how and where is this
excess indentified?
(b) The President of AB Company is puzzled. During the last year, the company experienced a net loss of Tk.
800,000 yet its cash increased Tk. 300,000 during the same period of time. Explain to the President how this
could occur.
(c)
On May 31, 2011, MONALISA Company had a cash balance per books of $ 28,907.50.
The bank statement from National Commercial Bank on that date showed a balance of $34,023.00.A
comparison of the statement with the cash account revealed the following facts:
1.
The statement includes a debit memo of $ 200.00 for the printing of additional company checks.
2.
Cash sales of $ 4,180.75 on May 12, were deposited in the bank. The cash receipts journal entry and the
deposit slip were incorrectly made for $ 4,230.75. The bank credited Monalisa Company for the correct
amount.
3.
Outstanding checks at May 31, totaled $ 6,381.25 and deposits in transit were $ 4,680.75.
4.
On May 18, the company issued check no. 1181 for $ 3,425.00 to M. Helal, on account. The check, which
cleared the bank in May, was incorrectly journalized and posted by Monalisa Company for $ 3,290.00.
5.
A $ 10,000.00 note receivable was collected by the bank for Monalisa Company on May 31, plus $ 400.00
interest. The bank charged a collection fee $ 100.00. No interest has been accrued on the note.
6.
Included with the cancelled checks was a check issued by Taher Company to P. Jamal for $ 3,000.00 that
was incorrectly charged to Monalisa Company by the bank.
7.
On May 31, the bank statement showed on NSF charge of $ 3,500.00 for a check issued by W. Huda, a
customer, to Monalisa Company on account.
Required:
(1) Prepare a bank reconciliation at May 31, 2011.
(2) Prepare necessary adjusting entries for Monalisa Company at May 31, 2011.
[Marks: (3+3+14) = 20]
Q. No. 4.
Listed below are selected items from the financial statements of PHP manufacturing Company for the year ended
December 31, 2011.
Particulars
Amount ($)
Notes Payable to HSBC
99,000
Income tax payable
63,000
Loss contingencies relating to lawsuit
2,00,000
Accounts payable and accrued expenses
1,63,230
Mortgage notes payable
2,40,864
Bonds payable
22,00,000
Premium on bonds payable
1,406
Accrued bond interest payable
1,10,000
Pension expenses
61,400
Unearned revenue
25,300
Other information:
(i)
The notes payable owed to HSBC is due in 30 days. PHP has arranged with this bank to renew the notes for an
additional two years.
(ii)
PHP has been sued for $2,00,000 by someone claiming the companys pumps are excessively noisy. It is
reasonably possible, but not probable, that a loss has been sustained.
(iii) The mortgage note is payable at $8,000 per month over the next three years. During the next 12 months, the
principal amount of this note will be reduced to $1,69,994.
(iv) The bonds payable mature in seven months. A sinking fund has been accumulated to repay the full maturity of
this bond issue.
Required:
(a) Using the given information, prepare the current liabilities and long-term liabilities sections of a classified
balance sheet at December 31, 2011.
(b) Explain briefly how the information in each of the four numbered paragraphs (given above as other information)
affected your presentation of the companys liabilities.
[Marks: (10+10) = 20]
Page 2 of 55

FOUNDATION LEVEL
Q. No. 5.
(a) Loop Company is doing significant work to revitalize its warehouses. It is not sure whether it should capitalize
these costs or expense them. What are the implications for current year net income and future net income of
expensing across capitalizing these costs?
(b) SBJs non-current asset register gives the cost and accumulated depreciation to date for every non-current
asset held by the company. Prior to charging depreciation for 20X4, the total carrying amount of all non-current
assets on the register at 31 December 20X4 was $147,500. At the same date, the non-current-asset accounts in
the nominal ledger showed the following balances:
Cost to date
Accumulated Depreciation
Motor vehicles
$48,000
$12,000
Plant and machinery
120,000
30,000
Office equipment
27,500
7,500
You are told that:
(i)
An item of plant costing $30,000 has been sold for $23,500 during 20X4. The loss on disposal was $800.
No entries have been made for this disposal in the nominal ledger, but the asset has been removed from
the non-current-asset register.
(ii)
A motor car was purchased on 1 October 20X4 and correctly recorded in the nominal ledger. Its cost was
as follows:
List price of vehicle
$24,000
Trade discount
20%
Sales tax added at 17.5%
Insurance
$360
Annual vehicle licence tax
$130
Painting of company name
$100 (no sales tax)
The vehicle has not been entered in the non-current asset register.
(iii) Office equipment was purchased during 20X4, and entered on the non-current asset register but not in the
nominal ledger. Until the omission can be investigated fully, its cost is deemed to be the difference
between the balances on the non-current asset register and the nominal ledger at 31 December 20X4
(prior to charging depreciation for the year).
(iv) Depreciation for 20X4 is to be charged as follows:
Motor vehicles
25% per annum straight line on an actual time basis
Plant and machinery
10% per annum straight line, with a full years depreciation in the
year of purchase
Office equipment
10% per annum reducing balance, with a full years depreciation in
the year of purchase
Requirements
(a) Calculate the balances at 31 December 20X4 for cost and depreciation to date on the three non-current
asset accounts (prior to the charging of depreciation for 20X4).
(b) Calculate the depreciation for each class of non-current asset for 20X4.
[Marks: {4+(10+6)} = 20]
=THE END=
Page 3 of 55

CMA DECEMBER, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT.
Time: Three hours

Answer THREE questions from each part, where Q. No. 4 and 8 are compulsory.


Use a fresh sheet for answering each question.

Marks: 100
GROUP A: BUSINESS COMMUNICATION

Q. No. 1.
(a)
Describe the roles and importance of communication in management.
(b)
What are the communication components and how do they interact?
(c)
Explain the methods to develop learning, reading, listening and writing skills and ability to communicate on your
respective fields of knowledge.
[Marks: (4+4+7) = 15]
Q. No. 2.
(a)
Define Business Report
(b)
Discuss the procedures of report writing
(c)
Draft a directors report of a public limited company

[Marks: (2+5+8) = 15]
Q. No. 3.
(a)
Do you think electronic device is a must for business communication? Explain
(b)
Describe how letter of credit is opened with a bank?
(c)
Write a CV with a forwarding letter for the post of Cost Accountant

[Marks: (5+5+5) = 15]
Q. No. 4.
Write short notes on any FIVE of the followings:
(a)
Letter of Indemnity.
(b)
Central Depository System.
(c)
Credit Rating.
(d)
Merchant Banking.
(e)
Letter of Credit.
(f)
Organization chart.
(g)
Business ethics.
(h)
Proxy to AGM.
[Marks: (5 x 4) = 20]
Page 4 of 55
CMA DECEMBER, 2012 EXAMINATION

FOUNDATION LEVEL
SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT.
GROUP B: OFFICE MANAGEMENT

Q. No. 5.
(a)
What is motivation?
(b)
Do you think motivation for the office employees is necessary? If so, why?
(c)
Explain Good Relationship between employer and employee is must.

[Marks: (3+6+6) = 15]
Q. No. 6.
a)
How would you define Job description?
b)
What are the methods of Job evaluation used in an office? Discuss
c)
Training of office employees is an essential activity in a business organization- Justify the statement
[Marks: (3+6+6) = 15]
Q. No. 7.
(a)
How can the principles of scientific management be applied in the design and organization of the office of a
large company?
(b)
Prepare the organogram of a typical commercial bank operating in our country.
(c)
How can the Reception Desk in the office of a telecom company be designed?
[Marks: (5+5+5) = 15]
Q. No. 8.
(a)
Briefly describe the different techniques that may be used in controlling office cost.
(b)
What can be the components of the job description of an office manager?
(c)
Office forms can greatly contribute to the enhancement of administrative efficiency of an organization. Give
arguments in support of this statement.
[Marks: (8+7+5) =20]
==THE END==
Page 5 of 55

FOUNDATION LEVEL
SUBJECT: 003. QUANTITATIVE TECHNIQUES
Time: Three hours

Answer any TEN questions, FIVE from each Part.

All questions carry equal marks.


Full Marks: 100
PART-A : BUSINESS MATHEMATICS

Q. No. 1.
(a) A company studies the product preferences of 25,000 consumers. It was found that each of the products A, B
and C was liked by 8000, 7000 and 6000 respectively and all the products were liked by 1500. Products A and B
were liked by 3000, Products A and C were liked by 2000 and Products B and C were liked by 2200. Prove that
the study results are not correct.
(b)
Find the rate of interest that compounded annually, will result in tripling a sum of money in 10 years.
[Marks: (5+5) = 10]
Q. No. 2.
(a) A firm invested Tk. 20,000 in a new factory that has a net return of Tk. 2,000 per year. An investment of Tk.
40,000 would yield a net income of Tk. 8,000 per year. What is the linear relationship between the investment
and annual income? What would be the return on an investment of Tk. 30,000?
(b)
(2
Find (i)
x + 5x-1 + 3x2)dx
(ii)
3x + 2
dx .
(1 + x)(1 + 2 x)
[Marks: (6+4) = 10]

Q. No. 3.
(a) Find the equation of the line perpendicular to 5x+7y+35 = 0 passing through the intersection of 3x+4y = 24 and
4x 5y = 40
(b)
Solve for x: 22x 3.2x + 2 = 0
[Marks: (5+5) = 10]

Q. No. 4.
(a) A man borrows Tk. 2,00,000/- and repays the loan by yearly installments of Tk. 20,000/-, the first installment
being paid one year after the loan. After how many years will the borrower be out of debt, interest being
reckoned throughout at 5% per annum.
(b)
0 1 0
If A = 0 0 1 ,B=
1 0 0
0 0 1
1 0 0 , than show that B2 = A and B3 = I
0 1 0
where I is the unit matrix of order 3.

[Marks: (4+3+3) = 10]
Q. No. 5.
(a) If the letters of the word WOMAN be permuted and the words so formed be arranged as in a dictionary what
will be the rank of the word WOMAN?
(b)
If tanx =
Sin Cos
where and x are both positive and acute angles.
Sin + Cos
Prove that
Sinx =
(Sin Cos )
2
[Marks: (5+5) = 10]
Page 6 of 55

FOUNDATION LEVEL
Q. No. 6.
(a) If the roots of x2 px + q = 0 are and , form the equation whose roots are
( + + ) and ( - ).
(b)
Find the area of the region enclosed by y = x and y = -x2 .

[Marks: (5+5) = 10]
Q. No. 7.
(a) Solve the following system of linear equations by matrix method,
x + 2y 3z = 6,
2x y + 4z = 2,
4x + 3y 4z = 14.
(b)
Total cost of producing x units is
5 2
5
x + 175x + 125 and the price at which each unit can be sold for (250 - x).
4
2
What should be the output for a maximum profit? Calculate the maximum amount of profit.
[Marks: (5+5) = 10]
PART-B : BUSINESS STATISTICS
Q. No. 1.
(a) Define business statistics. Discuss the uses of statistics in business and management decisions.
(b) Define variable. Distinguish between (i) Population & Sample (ii) Primary data & Secondary data (iii) quantitative
variable & qualitative variable.
[Marks: (6+4) = 10]
Q. No. 2.
(a) Define measures of central tendency with their classifications. What are the characteristics of a good measure
of central tendency?
(b) The following data gives the weekly wage distribution of the workers of a commercial Organization:
Weekly wages
2000-2500
2500-3000
3000-3500
3500-4000
4000-4500
(in Tk.)
No. of workers
6
10
22
40
16
(i)
Compute arithmetic mean and median of this distribution.
(ii)
Find the wage range of the central 50% workers.
(iii) It is decided to collect tax from those having weekly income of Tk. 3800 and above. What percent of the
workers are taxable?
[Marks: (5+5) = 10]
Q. No. 3.
(a) What are the different relative measures of dispersion? Define variance and standard deviation.
(b) A purchasing agent obtained samples of incandescent lamps from two suppliers. He had the samples tested in
his own laboratory for length of life with the following results.
Length of life (hrs)
700-900
900-1100
1100-1300
1300-1500
Lamp of company A:
10
16
26
8
Lamp of company B:
3
42
12
3
(i)
Which companys bulbs give a higher average life?
(ii)
Which companys lamps are more uniform?
[Marks: (4+6) = 10]
Page 7 of 55

FOUNDATION LEVEL
Q. No. 4.
(a) Define skewness and kurtosis? Explain different types of skewness and kurtosis with necessary graphs. For a
distribution mean is 50, Pearsons coefficient of skewness is -0.4 and coefficient of variation is 40, find standard
deviation, median and mode.
(b) What do you mean by moment of any distribution? Establish a relationship between first four central moments in
terms of raw moments.
[Marks: (5+5) = 10]
Q. No. 5.
(a) What are the differences between correlation and regression analysis?
(b) The following data gives the information on sales and advertising expenses for last 5 months of a particular
furniture shop. The data were recorded as follows:
Advertising expense (lac Tk.), x
2
4
5
3
8
Sales revenue (lac Tk.), y
7
10
12
8
15
(i)
Draw a scatter diagram.
(ii)
Fit a linear regression model.
(iii) Estimate the sales revenue if advertisement expense is Tk. 20 lac.
[Marks: (3+7) = 10]
Q. No. 6.
(a) Define normal distribution with their important properties. What are the differences between Type-I error and
Type-II error?
(b) The mean length of a small counterbalance bar is 43 millimeters. The production supervisor is concerned that
the adjustments of the machine producing the bars have changed. He asks the Engineering Department to
investigate. Engineering Department selects a random sample of 12 bars and measures each. The results are
reported below in millimeters:
42, 39, 42, 45, 43, 40, 39, 41, 40, 42, 43, 42
Is it reasonable to conclude that there has been a change in the mean length of the bars? Use the 0.05
significance level.
[Marks: (5+5) = 10]
Q. No. 7.
(a) Define sampling. Discuss different types of sampling with examples. Explain a situation where judgment
sampling gives better result than probability.
(b) Distinguish between (i) simple hypothesis & composite hypothesis (ii) Level of significance & power of the test
(iii) Mutually exclusive events and independents events.
[Marks: (6+4) = 10]
=THE END=
Page 8 of 55
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANT OF BANGLADESH

FOUNDATION LEVEL
SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS
Time: Three hours

Answer FIVE questions, taking at least TWO from each group A and B.

Show computations where necessary.


Marks: 100
GROUPA: BUSINESS ECONOMICS

Q. No. 1.
(a) Distinguish between Economics and Managerial Economics. Discuss the role of Managerial Economics in
Management decision making.
(b) Explain why economic profit is not always equal to accounting profit.
(c)
Explain the law of demand and supply with examples of exceptions.
[Marks: (7+5+8) = 20]
Q. No. 2.
(a) Discretionary Fiscal Policy requires deliberate changes in taxes or government outlays or both Explain this
statement with examples.
(b) Distinguish between (any two):
(i)
GDP and GNP
(ii)
Inside Money and Outside Money
(iii) Inflation and deflation.
(c)
Given below is the data of a nations economy. You have to ascertain the following:
(i) GNP at Factor Cost,
(ii)
NNP at Factor Cost,
(iii) Net Domestic Product at Factor Cost,
(iv) Net Domestic Product at market prices.
Data
GNP at Market Prices
Net Factor Income from Abroad
Subsidies
Depreciation
Direct Taxes
Indirect Business Taxes
Value in Million BDT

175,000
(-) 382
3,100
9,558
2,100
7,155
[Marks: (6+7+7) = 20]

Q. No. 3.
(a) Illustrate the condition of Excess Demand and Excess Supply.
(b) Why does demand curve usually slop downwards to the right? Are there any exceptions to this?
(c)
Describe the managerial implications of price elasticity and income elasticity of Demand.
(d) Suppose a market consists of consumers A, B and C whose inverse demand functions are given below:
A: P = 30 - 0.50QA
B: P = 100 - 0.25QB
C: P = 40 - 2.00QC
Calculate the (i) Market demand function for the commodity and (ii) Determine the equilibrium price and
quantity, if the market supply function is given by Qs = 30+3.5P.
[Marks: (5+4+5+6) = 20]
Q. No. 4.
(a) What is the difference between Firm and Industry? Describe different ways of increasing profit of a firm?
(b) Explain the role of interest rate policy in the investment decision.
[Marks: (10+10) = 20]
Page 9 of 55

FOUNDATION LEVEL
SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS
Q. No. 5.
(a) Distinguish between:
(i)
Direct Cost and Indirect Cost.
(ii)
Marginal Revenue and Average Revenue.
(iii) Explicit Cost and Implicit Cost.
(b) Calculate average cost, marginal cost, marginal revenue and profit from the following data:
Units of output Total Cost (Tk.) Variable Cost (Tk.) Fixed Cost (Tk.)
Total Revenue
(Tk.)
1
500
200
300
300
2
700
400
300
600
3
850
550
300
900
4
1000
700
300
1150
5
1100
800
300
1400
6
1200
900
300
1600
[Marks: (8+12) = 20]
GROUPB: INTERNATIONAL BUSINESS
Q. No. 6.
(a) What are the common Import procedures which Bangladeshi Traders need to observe?
(b) Explain the major barrier and limitations in the expansion and diversification of Export from Bangladesh.
(c)
Describe the specific export development strategies for Bangladeshi products.
(d) What do you mean by foreign exchange rate? Describe the impacts of exchange rate change.
[Marks: (4+5+6+5) = 20]
Q. No. 7.
(a) What is international business? Distinguish between the theory of Absolute advantage and the theory of
Comparative advantage.
(b) What are the positive and negative economic impacts of transit to India by Bangladesh? Explain.
[Marks: (10+10) = 20]
Q. No. 8.
Write short notes on any FIVE of the followings:
a.
Ownership advantage
b.
Platform Strategy
c.
Mercantilism
d.
Pre-shipment Inspection (PSI)
e.
Regional Economic Integration
f.
Regional Trading Arrangements
g.
Generalized System Of Preferences (GSP)
[Marks: (4x5 = 20)]
== THE END ==
Page 10 of 55

PROFESSIONAL LEVEL-I
SUBJECT: 101. INTERMEDIATE FINANCIAL ACCOUNTING.
Time: Three hours
*
*
*
*
Full Marks: 100
Q. No. 1.
(a) Define and Illustrate Provisions, Contingent Liabilities and Contingent Assets as per IAS-37 and FASB
statement no. 5.
(b) Explain the accounting for different types of loss contingencies and gain contingencies along with their
disclosure in the financial statement.
(c)
The draft financial statement of Minar Ltd. for the year ended December 31, is Currently under reviews, the
following points have been raised:(i)
An ex-employee has started an action against the company for wrongful dismissal. The companys legal
team have stated that the ex-employee is not likely to succeed. The following estimates have been given
by the lawyers relating to the case:
*
Legal costs to be incurred whether the claim is successful or not
Tk. 10,000.
*
Settlement of the claim if successful
Tk. 1,00,000.
Currently, the Provision has been made by the Company in the financial statements.
(ii)
The company has a policy of refunding the cost of any goods returned by dis-satisfied customers, even
though it is under no legal obligation to do so. This policy of making refunds is generally known. At the
year end, returns totaling Tk. 6,000 have been made.
(iii) A claim has been made against the company for injury suffered by a pedestrian in connection with
building work by the company. Legal advisers have confirmed that, the company will probably have to
pay damages for Tk. 2,00,000 but that a counter claim made against the building sub-contractors for Tk.
1,00,000 would probably be successful.
Required: State with reasons what adjustments, if any, should be made by the company in the financial statements.
(d) State which of the following are adjusting events for Swomon Ltd. The financial year ends on June 30, 2011 and
the accounts are approved on August 17, 2011:(1) Sales of Closing Inventory on July 3, 2011 at less than cost.
(2) The issue of new common shares on July 4, 2011.
(3) A fire in the main warehouse occurred on July 7, 2011. All goods were destroyed.
(4) A major Credit Customer was declared bankrupt on July 11, 2011.
(5) All of the share capital of a competitor, Sayon Ltd. was acquired on July 14, 2011.
[Marks: (5+5+5+5) = 20]
Q. No. 2.
The following trial balance has been extracted from the books of accounts of Keya International Ltd. As at 31 March,
2012.
T aka
Taka
Purchases
960,000
Inventories (at 1 April 2011)
150,000
Accounts payables
260,000
Revenue
2,010,000
Administrative expenses
210,000
Ordinary share capital
600,000
Accounts receivable
470,000
Advance, Deposit and prepayments
200,000
Bank overdraft
80,000
Provision for warranty costs
205,000
Distribution costs
420,000
Non-current asset investments
560,000
Investment income
75,000
Finance cost
10,000
Freehold land and buildings at cost
200,000
Term loan
200,000
Page 11 of 55

Q. No. 2 (Contd.)
Plant and equipment at cost
Plant & equipment Accumulated depreciation (at 31
March 2012)
Retained earnings (at 1 April 2011)
Final dividend paid for 2011
Interim dividend paid for 2012
Taka
550,000
T aka
-
65,000
35,000
220,000
180,000
-
3,830,000
3,830,000
Additional information:
(i)
Inventories at 31 March 2012 were valued at Tk. 160,000.
(ii)
The following items are already included in the balances listed in this trial balance.
Distribution Costs
Administrative Expense
Depreciation charge for the year
27,000
5,000
Employee expense
150,000
80,000
(iii) The income tax charge for the year is estimated at Tk. 74,000.
(iv) The warranty provision is to be increased by Tk. 16,000, charged to administrative expenses. Product warranty
period is 2 years.
(v)
Staff bonuses totaling Tk. 40,000 are to be provided for, charged equally to distribution costs and administrative
expenses.
(vi) The freehold land and buildings were bought on the last day of the accounting period at a bargain price. They
are to be revalued to Tk. 280,000.
(vii) In May 2012 a final dividend for 2012 of 10 paisa per share was proposed on each of the companys 600,000
ordinary shares.
Required:
Prepare the following in the books of Keya International Ltd.
(a) Statement of Comprehensive Income for the year ended 31 March 2012.
(b) Statement of Changes in Equity for the year ended 31 March 2012.
(c)
Statement of Financial Position as at 31 March 2012 and
(d) Notes to the financial statements (if required) in accordance with the requirements of BAS I.
[Marks: 20]
Q. No. 3.
The balance sheet of Shaad Chemical Industries Ltd. As at 30 June 2012, including comparative figures, is given
below:
2011
ASSETS
2012
Taka
Taka
Non-current assets
Property, plant and equipment
333,000
311,000
Less: Accumulated Depreciation
(70,000)
(69,000)
263,000
242,000
Investment
50,000
Total non-current assets
313,000
242,000
Current assets
Inventories
12,000
11,000
Trade and other receivables
29,000
27,000
Cash and cash equivalents
20,000
10,000
Total current assets
61,000
48,000
Total assets
374,000
290,000
EQUITY AND LIABILITIES
Capital and reserves
Ordinary share capital (Tk. 1 per ordinary share)
95,000
50,000
Share premium
15,000
10,000
Revaluation reserve
12,000
12,000
Retained earnings
149,000
115,000
Total capital and reserve
271,000
187,000
Non-current liabilities
Interest-bearing borrowings (12% Debenture)
50,000
60,000
Page 12 of 55

Q. No. 3 (Contd.)
Current liabilities
Trade and other payables
27,000
19,000
Provisions
2,000
Accruals
19,000
19,000
T ax liability
7,000
3,000
Total current liabilities
53,000
43,000
Total equity and liabilities
374,000
290,000
You are also given the following information which is already reflected correctly in the accounts.
(i)
During the year a bonus issue of 1 for 10 was made on the ordinary shares in issue utilizing available profits at
30 June 2011.
(ii)
New shares were issued on 1 July 2011. Part of the proceeds was used to redeem Tk. 10,000, 12% debentures
at par.
(iii) Trade and other payable include Tk. 5,000 for 2012 relating to the fixed asset purchases.
(iv)
During the year certain tangible non-current assets were disposed of for Tk. 20,000. The assets had originally
cost Tk. 40,000 and had a net book value at the disposal date of Tk. 18,000.
(v)
The corporation tax charge for the year is Tk. 7,000.
Required:
Prepare a cash flow statement using indirect method for the year ended 30 June 2012 and the note reconciling profit
before tax with cash generated from operations.
[Marks: 20]
Q. No. 4.
(a) For the year ending 30th June 2012, the Sales, Purchases, Opening Stock and Closing Stock of a Trader was
Tk. 5,00,000, Tk. 3,80,000, Tk. 65,000 and Tk. 52,000 respectively. Some goods were destroyed by fire (without
realization of any value) during the year.
If the Trader earned Gross Profit @ 25% on Sales for the year, calculate the value of goods destroyed by fire.
(b) At the end of year 2011 the following information for Muttakeen Ltd. Department Store was obtained:
Particulars
Cost
Retail
(Tk. 000)
(Tk. 000)
Beginning inventory
20,460
31,000
Purchases
207,735
337,271
Purchases returns
7,320
12,021
Sales
-316,148
Sales Returns
-3,198
Required: Prepare a schedule computing Muttakeen Ltd.s ending inventory at cost using the Retail Method.
(c)
Monyem Ltd. purchased machinery from Ananto Ltd. on 30.09.2012. The machinery was ready for use on
01.12.2010. However it was actually put to use only on 01.05.2011.
The price was Tk. 380,44,000 before charging the following:
i.
Truncated VAT on goods sold @ 4%.
ii.
Giving a trade discount @ 2% on the quoted price.
iii.
Transport charges @ 0.25% on the quoted price and
iv.
Installation charges come to 1% on the quoted price.
A loan of Tk. 310,00,000 was taken from the Sonali Bank Ltd. on which interest @ 15% per annum was to be
paid. Expenditure incurred on the trial run was as follows:
A.
Material Tk. 35,000
B.
Wages Tk. 25,000 and
C.
Overhead Tk. 15,005.
Find out the cost of the machine and suggest the accounting treatment for the expenses incurred in the internal
between the dates 01.12.2010 to. 01.05.2011. The entire loan amount remained unpaid on 01.05.2011.
[Marks: (5+6+9) = 20
Page 13 of 55

Q. No. 5.
(a) The statutory audit of FYR Ltd. for year ended June 30, 2012, was completed on August 30, 2012. The financial
statements were signed by the Managing Director on September 8, 2012, and approved by the shareholders on
October 10, 2012. The next events have occurred.
(1) On July 15, 2012, a customer owing Tk. 900,000 to FYR Ltd. filed for bankruptcy. The financial statements
include an allowance for doubtful debts pertaining to this customer only of Tk. 50,000.
(2) FYR Ltd.s issued capital comprised 100,000 Ordinary Shares. The company announced a bonus issue of
25,000 shares on August 1, 2012.
(3) Specialized equipment costing Tk. 545,000 purchased on March 1, 2012, was destroyed by fire on June
13, 2012. On June 30, 2012, FYR Ltd. has booked a receivable of Tk. 400,000 from the Insurance
company pertaining to this claim. After the insurance company completed its investigation, it was
discovered that the fire took place due to negligence of the machine operator. As a result, the insurers
liability was zero on this claim by FYR Ltd.
Required:
How should FYR Ltd. account for these three post-balance sheet events? Identify the adjusting and nonadjusting events.
(b) What are the qualitative characteristics of the financial statements which improve the usefulness of the
information furnished therein?
(c)
ZIT plans to dispose of a group of net assets that form a disposal group. The net assets at December 31, 2011,
are
Carrying value at
December 31, 2011
(TK.)
Goodwill .
60,00,000
Property, plant, and equipment (PPE)
180,00,000
Inventories
100,00,000
Financial assets (profit of Tk. 20 lac recognized in equity)
70,00,000
410,00,000
Less: Financial liabilities
(40,00,000)
370,00,000
On moving to accounting under IFRS, some of the assets had been transferred at deemed cost and had not been
remeasured under IFRS. These assets were property, plant, and equipment, and inventory. Under IFRS, property,
plant, and equipment would be stated at Tk. 160,00,000 and inventory stated at Tk. 90,00,000. The fair value less
costs to sell of the disposal group is Tk. 250,00,000. Assume that the disposal group qualifies as held for sale.
Therefore, under IAS 36, any impairment loss will be allocated to goodwill and PPE.
Required:
Describe how the disposal group would be shown in the financial statements for the year ended December 31, 2011.
[Marks: (6+5+9) = 20]
=THE END=
Page 14 of 55

CMA DECEMBER-2012 EXAMINATION
SUBJECT: 102. COST ACCOUNTING.
Time: Three hours




Full Marks: 100
Q. NO. 1.
Six Sigma is a sheet metal fabricator. Its total factory overhead cost is a linear function of machine usage. Different
capacity levels (annual) of Six Sigma is given below
Theoretical Capacity
: 25,000 machine hours
Practical Capacity
Normal Capacity
Expected Actual Capacity
Six Sigma computes predetermined overhead rate by dividing expected actual costs by expected actual capacity at
the beginning of each year. During 2011, it actually works for 9,500 machine hours (MH) with actual overheads
amounting to Tk.3,385,000. But the budgeted amount of factory overhead was Tk.3,500,000 which would be
Tk.3,000,000 at normal capacity.
Required:
(1) Calculate the amount of over or under applied factory overhead for the year.
(2) If it had used practical capacity as the activity level in its predetermined overhead rate calculation for the year,
what would the predetermined overhead rate have been per MH?
(3) Using the predetermined overhead rate as computed in req. 2, compute the price of a product considering the
information below:
Direct Material
350
Direct Labor
289
Machine Hours Used
1.5
Mark-up
@ 15%
(4) Without influencing your answer to requirement 1, now assume factory overhead was under applied by
Tk.10,000. Give the end-of-period entries to close applied factory overhead to factory overhead control and to
close factory overhead control to cost of goods sold.
(5) Without prejudice to your answers to the preceding requirements, assume overhead was under applied by
Tk.10,000 and applied factory overhead has already been closed to factory overhead control. The under applied
amount of overhead is to be allocated to inventories and cost of goods sold in proportion to the balances in
those accounts. The balances in work in process, finished goods and cost of goods sold are Tk.200,000,
Tk.400,000 and Tk.7,400,000 respectively. Give the end-of-period entry to close factory overhead control.
(6) What are the impacts of requirements 3 and 4 on income statement? Which one is more suitable for factory
manager?
[Marks:
20]
Q. NO. 2.
(a) Define and distinguish mark-up and margin. What is its bearing in product pricing?
(b) Purple Manufacturer owns a sophisticated working environment with modern set up and skilled manpower. Its
cost accounting department is very much structured in terms of recording and reporting cost data and such
reporting is done regularly at the end of each month when it needs new set up for further production. The cost
data and other information for the month of June 2012 has been accumulated below from different sources and
you are asked to prepare a statement of cost of goods sold and income statement for the month.
i.
The month started with no inventory and during the month 45,000 kg of raw material was purchased at a
cost of Tk.7.8 per kg. 1,000 kg was returned back due to inferior quality. Transportation costs attached to
the purchase was Tk. 2,080 and born by the supplier as per the condition.
ii.
Purple has 200 workers who are supposed to work for 8 hours a day, 5 days a week and 40 hours in a
week each. Regular rate is Tk.8 per hour. If the workers work for any additional hour, these are
considered as overtime and are paid at time and a half. But payment in no case goes below the regular
rate for the regular hours worked. During the month a total of 34,225 hours were worked in total. (Assume,
1 month = 4 weeks)
iii.
Indirect material costs amounts to 2.5% of direct material consumed on an average.
Page 15 of 55

SUBJECT: 102. COST ACCOUNTING
Q. No. 2(b) (Contd.)
iv.
Overtime premium is reported as a part of factory overhead and indirect labor costs will be 3% of direct
labor costs.
v.
The utility cost is a mixed cost and utility cost function is reached at Y = Tk.2,500 + Tk.0.8X where, Y
represents utility costs and X represents number of units produced.
vi.
During the month a total of 12,000 units were produced and sold. For producing 1 unit, 3.5 kg of raw
materials are needed.
vii. Unit selling price is set at Tk.100 for the wholesaler and sold to retailer at a 10% mark up. Purple sales to
wholesaler only.
viii. Sales commission is given at the rate of 2% of sales revenue.
ix.
Administrative salaries amounted to Tk.20,000 and sales persons salaries amounted to Tk. 12,000 for the
month.
x.
Other expenses includes (for the month):
Category of Costs
Amount
Category of Costs
Amount
(Tk.)
(Tk.)
Interest expense
2,000 Depreciation - Factory
800
Property tax
1,500 Depreciation - Office
700
Advertising expense
1,000 Freight out
600
[Marks: (5+15) = 20]
Q. No. 3.
(a) What are the distinguishing features of a process cost system.
(b) The Anderson Company manufactures a mechanical device known as Klebo. The company uses a process
cost system. The manufacturing operations take place in one department and are given as follows.
Material K, a metal, is stamped to form a part which is assembled with one of the purchased parts X. The unit
is then machined and cleaned after which it is assembled. With two units of part Y to form the finished device
known as a Klebo Spray priming and enameling is the final operation.
Time-and-motion studies indicate that of the total time required for the manufacture of a unit, the first operation
required 25% of the labor cost, the first assembly an additional 25% machining and cleaning 12.5% , the second
assembly 25%, and painting 12.5%. Factory overhead is considered to follow the same pattern of operations as
does labor.
The following data to apply to October, the first month of Operation:
Material K purchased 100,000 kilograms ..
Tk.25,000
Part X purchased 80,000 units.
Tk.16,000
Part Y purchased 150,000 units...
Tk.15,000
Primer and enamel used ..
Tk.1,072
Direct labor..
Tk.45,415
Factory overhead......
Tk.24,905
Units finished and sent to finished goods warehouse..
67,000
Units assembled but not painted
5,000
Units ready for the second assembly
3,000
Inventories at the end of the month:
Material K (kg.).
5,800
Part X (units of part X)
5,000
Part Y (units of part Y)
6,000
Klebos in process (units)
8,000
Units in finished goods inventory.
7,500
Required:
A cost of production report showing total costs, equivalent production, unit cost, cost of goods finished and work
in process inventories.
Marks: (5+15) = 20
Q. No. 4
(a) Define Activity Based Costing.
(b) What types of costs should not be assigned to products in an Activity- Based Costing system?
Page 16 of 55

SUBJECT: 102. COST ACCOUNTING
Q. No. 4(c) (Contd.)
(c)
BROWN Corporation makes a single product A fire resistant commercial filing cabinet that it sells to office
furniture distributors. The company has a single ABC system that it uses for internal decision-making. The
company has two overhead departments whose costs are listed as below:
Manufacturing Overhead
Tk. 5,00,000
Selling & Admin. Overhead
Tk. 3,00,000
Total
Tk. 8,00,000
The companys ABC system has the following activity cost pools and activity measures :
Activity Cost Pool
Activity Measure
Assembling Unit
Number of units
Processing Orders
Number of Orders
Supporting Customers
Number of Customers
Other
Not Applicable
Costs assigned to the Other activity cost pool have no activity measure: they consist of unused capacity and
organization sustaining cost neither of which are assigned to Product, Orders & Customers. Brown
Corporation distribution the cost of manufacturing overhead and of selling and administrative overhead to
activity costs pools based on employees interviews, the result of which are reported below:
Distribution of Resources Consumption Across Activity Cost Pools
Assembling Processing
Supporting
Other
Total
Units
Orders
Customers
Manufacturing Overhead
50%
35%
5%
10%
100%
Selling & Admin Overhead
10%
45%
25%
20%
100%
Total Activity
1000 units
250 orders
100 customers
Required:
(i)
Perform the first stage allocation of overhead costs to the activity costs pool.
(ii)
Compute activity rates for activity costs pool.
(iii) Office mart is one of the Browns customers last year, office mart ordered filing cabinets for different
times. Office Mart ordered a total of 80 filing cabinets during the year. Show the overhead costs of these
80 units and 4 orders.
(iv) The selling price of filing cabinets is Tk. 595 The cost of direct material is Tk. 180 per filing cabinets, and
direct labor is Tk. 50 per filing cabinet. What is the product margin on the 80 filing cabinets ordered by
Office Mart. How profitable is Office Mart as a customer?
[Marks: (2+3+ 3+3+3+6) = 20 ]
Q. NO. 5.
(a) What is reorder point? Does safety stock influence reorder point?
(b) What is the impact of changes in number of orders on reorder point?
(c)
Garish Woodcrafts use mathematical modeling to control inventory. For a typical year, you have been provided
with the following information:
Monthly Requirements
3,000 units
Selling Price/Unit
Tk. 900
Lead Time
6 days
Normal Usage
100 units/day
Maximum Usage
150 units/day
Minimum usage
50 units/day
Cost/Unit
Tk.500
Transportation cost each time
Tk.150
Documentation cost to place the order
Tk.120
Inspection cost for checking each time
Tk.180
Storing cost of each inventory
Tk. 20
Finance cost of each inventory
Tk. 40
Insurance cost per inventory
Tk. 15
Loading and Unloading cost
Tk.300
Required:
(i)
Compute economic order quantity.
(ii)
Compute the total amount of carrying and ordering costs for the year.
(iii) Compute the amount of safety stock, if any.
(iv) Compute the amount of normal maximum inventory.
(v)
Compute the amount of absolute maximum inventory.
(vi) Determine the number of days until the next order should be placed, assuming that the present inventory
level is 1,200 units. (360 days = 1 year)
(vii) Why do you need to maintain safety stock in this situation?
[Marks: 3+2+15 = 20]
=THE END=
Page 17 of 55

SUBJECT: 103. MANAGEMENT AND MARKETING MANAGEMENT
Time:

Three hours
Answer any THREE questions from each part.
Full Marks: 100
PART- A : MANAGEMENT (TOTAL MARKS-50)

Q. No. 1.
(a) Management is getting things done by others. Do you advocate the statement?
(b) What basic managerial roles and skills should posses by a manager?
(c) What are the contemporary issues and challenges face by an organization now a days?
[Marks: (4+8+4) = 16]
Q. No. 2.
(a) Differentiate between internal and external environment of an organization.
(b) Organizational environments affect the effectiveness of an organization. How would you evaluate this
issue?
(c) What is meant by organizational culture?
[Marks: (4+8+4) = 16]
Q. No. 3.
(a) What factors determine the appropriate span of management in a particular setting?
(b) Explain the difference between line and staff positions.
(c) Identify the areas of change in an organization. Why do people resist change? How can managers
help overcome this resistance?
[Marks : (6+4+6) = 16]
Q. No. 4.
(a) How would you define and differentiate Corporate level and Business level strategy? Give example.
(b) Which strategy should a firm develop first Business level or Corporate level strategy? Explain why?
(c) Explain use of SWOT for formulating strategy.
[Marks : (4+6+6) = 16]
Q. No. 5.
(a) Describe the basic motivational process that employees go through as reflected in expectancy theory.
(b) Summarize the basic concepts underlying employee empowerment and participation.
(c) Leadership and Management are often related, but are also different Does an organization need
both? Why or why not?
[Marks : (5+5+6) = 16]
* Two marks are reserved for neatness and relevance.
Page 18 of 55

SUBJECT: 103. MANAGEMENT AND MARKETING MANAGEMENT
PART- B : MARKETING MANAGEMENT (TOTAL MARKS-50)
Q. No. 6.
(a) What do you understand by marketing management?
(b) Discuss the salient features of marketing management.
(c) Marketing people market ten types of entities. What are those?
[Marks: (4+6+6) = 16]
Q. No. 7.
(a) There are several competing philosophies, namely, selling concept, production concept and product
concept that exist. How are these different from one another? How are these different from the
marketing concept?
(b) Describe the significance of segmentation, targeting and positioning (STP) in a companys marketing
strategy.
[Marks: (8+8) = 16]
Q. No. 8.
(a) How do cultural factors influence our buying pattern?
(b) A persons reference groups are the major social factor that influences an individuals consumption
pattern. How?
(c) Explain the five stage model of consumer buying process.
[Marks: (6+4+6) = 16]
Q. No. 9.
(a) What are the different characteristics of a product that forms differentiation from others?
(b) Describe importance of packaging and labeling of a product.
(c) Price is not just a number on a tag, it has been the major determinants of a buyers choice explain.
[Marks: (7+4+5) = 16]
Q. No. 10.
(a) What is the role of marketing communication?
(b) Describe the major modes of communication of a Marketing communication mix.
(c) Direct marketing has been a fast-growing avenue for serving customers and building long term
relationship explain.
[Marks: (4+6+4) = 16]
* Two marks are reserved for neatness and relevance.

=THE END=
Page 19 of 55

SUBJECT: 104. INFORMATION TECHNOLOGY
Time: 2 hours 30 minutes
Answer any FOUR of the following questions.
Full Marks: 80
Q. No. 1.
(a) Define Information systems. Describe the key components of Information System.
(b) Discuss about system ethics in digital firm.
(c)
Describe the role of CKO in a company?
(d) What are the differences between fourth generation language and conventional programming language?
[Marks: (4X5) = 20]
Q. No. 2.
(a) Identify the key elements of the technology infrastructure required to successfully implement
e-commerce
within an organization.
(b) What do you think are the biggest barriers to wide-scale adoption of m-commerce by consumers?
(c)
Describe the multistage model for E-Commerce.
[Marks: (8+6+6) = 20]
Q. No. 3.
(a) Identify some of the advantages and disadvantages of purchasing versus developing software.
(b) Assume that you have a personal computer that is several years old. Describe the steps you would use to
perform system review to determine whether you should acquire a new PC.
(c)
Define the different types of feasibility that systems developer must consider.
[Marks: (7+7+6) = 20]
Q. No. 4.
(a) How can management information systems (MIS) be used to support the objectives of the business
organization?
(b) You have been hired to develop group support software (GSS). Describe the features you would include in your
new GSS software?
(c)
Describe the difference between a data-driven and a model-driven DSS.
[Marks: (7+7+6) = 20]
Q. No. 5.
(a) Describe HTML, http, FTP and URL.
(b) How can you design a computerized accounting System of a super store?
(c)
Describe the Electronic Payment System?
(d) What are the Telecommunication Software and Hardware?
[Marks: (4X5) = 20]
Q. No. 6.
Short notes:
(a)
OMR and OCR;
(b)
Cache Memory;
(c)
Audit Trial;
(d)
Internet Protocol;
(e)
Primary and Foreign Key.
[Marks: (4X5) = 20]
=THE END=
Page 20 of 55

PROFESSIONAL LEVEL-II
SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I
Time: Three hours
*
*
*
*
Full Marks: 100
Q. No.1.
(a) What are the objectives of Financial Statement in the context of the Framework for the preparation and
presentation of financial statements? What are the components to be included in a complete set of financial
statements as per IAS 1?
(b) Financial Accounting usually emphasizes on the economic substance of events though the legal form may
differ and suggest different treatments. Do you agree? If so, state the circumstances and give example in each
case.
(c)
State the circumstances in which an entity may change in accounting policy and explain how a change in policy
should be accounted for in accordance with IAS-8.
(d) Explain the use of and journal entries for a home offices Allowance for Overvaluation of Inventories: Branch
ledger account.
[Marks: (6+5+5+4) = 20]
Q. No. 2.
(a) Explain the following in the context of accounting for deferred tax:
(i)
Permanent differences,
(ii)
Timing Differences,
(iii) Short-term differences, and
(iv) Long-term differences.
(b) A Ltd. maintains deferred taxation account under liability method since 2010 and at the year end the account
shows a balance of Tk. 20 million.
Accounts for the year to 31 December 2011 have now been prepared and the following taxation information
compiled:
(i)
Tax rates applicable to the company are:
2010
35.00%
2011
35.00%
(ii)
Accounting depreciation charged in 2011 has been Tk.60 million but taxation laws would allow Tk.100
million as depreciation for the year.
(iii) Besides, non-admissible items have been charged in accounts amounting to Tk.2.50 million.
(iv) Accounts show a profit of Tk.90 million for the year 2011.
Tax liability of 2010 has been recently settled at an excess of Tk.0.50 million provided in the year.
Required:
Prepare the current and deferred taxation accounts of the company for the year ended 31 December 2011.
[Marks: (8+12) = 20]
Q. No.3.
(a) Describe the lessees accounting for sale-leaseback transactions.
(b) What disclosures are to be made by lessee and lessor for finance lease and operating lease as per IAS-17?
(c)
Bay Leasing Company signs an agreement on January 1, 2008, to lease equipment to KKK Company. The
following information relates to this agreement.
1.
The term of the non-cancelable lease is 5 years with no renewal option. The equipment has an estimated
economic life of 5 years.
2.
The fair value of the asset at January 1, 2008, is TK.80,000.
Page 21 of 55

Q. No.3. (Contd.)
3.
4.
5.
The asset will revert to the lessor at the end of the lease term, at which time the asset is expected to have
a residual value of Tk.7,000, none of which is guaranteed.
KKK Company assumes direct responsibility for all executor costs, which include Tk.900 to Rock
Mountain Insurance for Insurance.
The agreement requires equal annual rental payments of Tk.18,142.95 to the lessor, beginning on
January 1, 2008.
The lessees incremental borrowing rate is 10%.
KKK Company uses the straight-line depreciation method for all equipment.
KKK Uses reversing entries when appropriate.
Present value of an annuity due at 10% for 5 years is 4.16986.
6.
7.
8.
Required:
(i)
Prepare an amortization schedule that would be suitable for the lessee for the lease term.
(ii)
Prepare all of the journal entries for the lessee for 2008 and 2009 to record the lease agreement, the lease
payments, and all expenses related to this lease. Assume the lessees annual accounting period ends on
December 31.
[Marks: (4+4+12) = 20]
Q. No. 4.
(a) What are the disclosure requirements of Changes in accounting estimates as per IAS 8?
(b) From the following information (during the year ended 31 Dec, 2011 ) you are required to prepare Combined
Financial Statements for Carew & Company (Bangladesh) Limited and its branch Chittagong Sales office:
Carews
Chittagong
Office
Sales office
Income Statements
Tk.
Tk.
Sales
100000
60000
Opening Inventory
20000
8400
Purchases
95000
6000
Shipment from Carew
0
36000
115000
50400
Shipment to Chittagong office
30000
0
Ending Inventory
25000
7200
Costs of Goods sold
60000
43200
Other Expenses
25000
10000
Net Income to Retained Earnings
15000
6800
Retained Earnings Statements
Opening R.E.
57000
0
Net Income from above
15000
6800
Dividend
10000
0
Ending Retained earnings to B/S
62000
6800
Balance sheet
Cash
33000
14000
Receivables
20000
25000
Inventory
25000
7200
Investment in Chittagong office
32400
0
Net Plant & Machinery - Carew
75000
0
Net Plant & Machinery - Chittagong
24000
0
Other Assets
30000
0
Total
239400
46200
Current Liabilities
20000
7000
Long term Notes Payable
50000
0
Carew office
0
32400
Unrealized Profits in Shipments to Chittagong
7400 (1)
0
Capital Stock
100000
0
Retained Earnings From above
62000
6800
Total liabilities & Equity
239400
46200
(1) Unrealized profit for beginning Inventory is TK. 1,400.00 and for shipment for Chittagong is Tk. 6000.00
[Marks: (5+15) = 20]
Page 22 of 55

Q. No. 5.
(a) Define and distinguish the following:
(i)
Principal and Agent in consignment business, and
(ii)
Consignment and Joint Venture.
(b) Hannan and Mannan are involved in a consignment business where Hannan sends goods as consignor from
Narayangonj to Mannan of Barishal for retail sale. The goods are sent by barge.
Following are the transactions relating to consignment business:
500 units were sent @Tk.1,000 each
Tk.500,000
Fright charge paid by consignor
Tk.150,000
Loading charge paid by consignor
Tk. 50,000
Unloading charge paid by consignee
Tk. 24,000
Insurance charge paid by consignor
Tk. 10,000
Carrying charge to warehouse paid by consignee
Tk. 16,000
Warehouse rent paid by consignee
Tk. 20,000
100 units were lost by fire in transit by barge and remaining goods were unloaded from barge. Insurance claim
received Tk.120,000. They arranged for remaining 400 units to carry from barge to warehouse and paid carrying
charges. But 350 units were received at the warehouse in good condition with no trace of the remaining. 300
units were sold (@ Tk.2,000) at Tk.600,000 and 50 units are left in warehouse.
10% of good units received at warehouse are considered normal loss.
Due to decrease in market price, sales price of stock estimated to be @ Tk.1,400. Commission is paid to the
consignee @ 5% on sales.
Required:
Draw a consignment account in the books of Hannan.
[Marks: (6+14) = 20]
=THE END=
Page 23 of 55

SUBJECT: 202. MANAGEMENT ACCOUNTING
Time: Three hours
Marks: 100



Answer must be neat, brief and relevant.

Q. No. 1.
(a) One critic of cost allocation noted, You can avoid the problem of arbitrary cost allocation by simply not
allocating any common costs to other cost objects. What are your thoughts on this suggestion?
(b) T Company makes various types of calculators and other office products. Late in 2011, the firm had 20,000 units
of model Z-345 in stock. The unit cost was Tk. 18, of which Tk. 6 was allocated fixed overhead. The firm expects
to sell 80,000 units of this model in 2012 at Tk. 30 each, but makes only about 60,000 units because the model
is being discontinued and 20,000 units are currently on hand. The purchasing agent of a large chain store has
approached the sales manager of T Company with an offer to buy the 20,000 units at Tk. 14 each. The sales
manager talked to the production manager who pointed out that costs are increasing and showed the following
estimates of production costs for model Z-345 in 2012.
Tk.
Materials
8
Labour
4
Variable overhead
4
Fixed overhead
7
Total
23
The sales manager believed that even if he accepted the special order, he would be able to sell the 80,000 units
or so expected for 2012 because the chain store would sell in areas where T Company does little business.
Required: Identify the relevant costs and decide whether or not you would accept the order.
[Marks: (7+15) = 22]
Q. No. 2.
AB Ltd. manufactures a picnic table which has three components X, Y and Z, one of each being required for each
table. The company is working to its full machine capacity of 28,000 hours per period and the machinery used is
capable of making all the components.
The tables are made in batches of 20 and data relating to current production are:
Machine hours
Variable costs
Fixed costs
Table costs
Components
X
6
Tk. 15
Tk. 6
Tk. 21
Y
10
18
7
25
Z
12
18
18
36
Assembly
32
13
45
Total Cost
83
44
127
Profit
23
Selling price
150
Over the next budget period the machine capacity cannot be increased although the assembly capacity can be
increased as required. The budget for the next period is being prepared. Because sales are buoyant, the purchase of
one of the components is being considered and the following quotation has been received:
Batch of 20
Component
Price
X
Tk. 22
Y
28
Z
32
The company has decided that only one component will be bought from outside in one period. The sales director
thinks that he could sell at least 50% more tables than at present and probably 75% more provided that the production
capacity was available.
You are required to:
(i)
Recommend which component should be bought from outside if production is increased by 50% and how many
components should be bought.
(ii)
Recommend which component should be bought from outside if production is increased by 75% and how many
components should be bought.
[Marks: (10+15) = 25]
Page 24 of 55

Q. No. 3.
(a) What is the difference between a sales forecast and a sales budget?
(b) What is the role of sales forecasting in budgeting?
(c)
V Ltd. Produces two products P and Q. The draft budget for the next month is as under:P
Q
Budgeted production and sales (unit)
40,000
80,000
Selling price Tk./unit
Tk. 25.00
Tk. 50.00
Total Costs Tk./unit
Tk. 20.00
Tk. 40.00
Machine hours/unit
2
1
Maximum sales potential (unit)
60,000
100,000
The fixed expenses are estimated at Tk. 9,60,000 per month. The company absorbs fixed overheads on the
basis of machine hours which are fully utilized by the budgeted production and cannot be further increased
when the budget was discussed. The Managing Director stated that the product mix should be altered to yield
optimum profit.
The Marketing Director suggested that he could introduce a new Product C, each unit of which takes 1.5
machine hours. However, a processing vat involving a capital outlay of Tk. 2,00,000 is to be installed for
processing C. The additional fixed overhead relating to the processing vat was estimated at Tk. 60,000 per
month. The variable cost of product C was estimated at Tk. 21 per unit.
Required:
(i)
Calculate the profit as per draft budget for the next month.
(ii)
Calculate the profit revising the product mix on the basis of data given on P and Q to yield optimum profit.
(iii) The company decides to discontinue, either product P or Q whichever is giving lower profit and proposes
to substitute Product C instead. Fix the selling price of Product C in such a way as to yield 15% return on
additional capital employed besides maintaining the same overall profit as envisaged in (ii) above.
[Marks: {2+2+(5+5+5)} = 19]
Q.No.4.
Global Airlines is considering offering Business Class service on its transpacific routes. The problem Global faces is
that it wants the Business Class service to provide an equivalent return that it obtains from its Economy service. The
Business Class fare must be set in such a way that it will provide the same margin per seat as the Economy Class
fare. Management has some questions as to the appropriate way to assure that this objective will be met.
The published Economy Class fare is Tk. 80,000 one way; however, as noted by the revenue accounting manager,
discount fares result in an average Economy Class fare of Tk. 50,000 one way.
Business Class service would incur a meal cost estimated at Tk. 4,500 per passenger, whereas the Economy Class
meal service cost is Tk. 2,500 per passenger. For the space used for each seat in Business Class, it would be
possible to fit in 1.5 Economy Class seats. Baggage handling, reservations, and similar incidental costs are estimate
at Tk. 1,000 per passenger for the variable portion of those costs for either class. Fixed costs per flight (crew salaries,
fuel, landing fees, etc.) are allocated Tk. 27,500 per passenger for either class.
What fare for Business Class meets managements objectives?
[Marks: 15]
Q.No.5.
(a) United Company Ltd. produces three products P, Q and R. Data concerning the three products are as follows:
Product
P
Q
R
Selling Price per unit
Tk. 120
Tk. 96
Tk. 110
Direct Materials per unit
Tk. 32
Tk. 20
Tk. 12
Other Variable Expenses per unit Tk. 40
Tk. 52
Tk. 65
Demand for the companys products is very strong, with far more orders each month than the company has raw
materials available to produce. The material costs Tk. 4 per pound with a maximum of 5,000 pounds available
each month.
Required:
Which orders would you advise the company to accept first..for P, Q or R? Which orders second and third?
Page 25 of 55

Q.No.5. (Contd..)
(b)
(c)
(d)
Dhaka Company Ltd. produces several products from processing 1 ton of clypton, a rare mineral. Material and
processing costs total Tk. 60,000 per ton, one-fourth of which is allocated to Product X. Seven thousand units of
Product X are produced from each ton of clypton. The units can either be sold at the split-off point for Tk. 8.55
each, or processed further at a total cost of Tk. 25,380 and then sold for Tk. 12 each.
Required:
Should Product X be processed further or sold at the split-off point? To earn an additional income of Tk. 11,510,
what should the selling price per unit for Product X after further processing?
Zero-Base Budgeting is sometimes called Xerox-Base Budgeting. Do you agree? Why?
Write short notes on:
(i)
ABC and Pricing;
(ii)
Kaizen Budgeting; and
(iii) Ethical issues in budgeting.
[Marks: {6+5+2+(2+2+2) = 19]
=THE END=
Page 26 of 55

PROFESSIONAL LEVEL II
SUBJECT: 203-COMMERCIAL & INDUSTRIAL LAWS
Time: Three hours
Marks: 100
Answer SIX questions taking any THREE from each Part including compulsory question No. 5
and 10.
*
*

PART A: COMMERCIAL LAWS
Q. No. 1.
(a)
Discuss how many different ways the parties of a contract may agree to terminate the existence of a contract?
(b)
What are the essentials that must be present to constitute a valid contract of sales?
[Marks: (8+7) = 15]
Q. No. 2.
(a)
Describe circumstances in which a contract would be enforceable without consideration.
(b)
Define Quasi-Contract with few examples.

[Marks: (8+7) = 15]
Q. No. 3.
(a)
Define Trade Marks. State what are the marks or symbols that cannot be registered as trade mark?
(b)
Discuss the provision of law for crossing a cheque after issue.

[Marks: (8+7) = 15]
Q. No. 4.
(a)
What is an award?
b)
Briefly explain arbitral proceedings as discussed in the Arbitration Act, 2001.

[Marks: (5+10) = 15]
Q. No. 5.
Write short notes on any 4(four) of the following:
(i)
Del Credere Agent
(ii)
Voidable Agreement
(iii)
Caveat Emptor
(iv)
Escrow
(v)
Bill of Lading
(vi)
Copy Right
[Marks: (4 x 5) =20]
Page 27 of 55

PROFESSIONAL LEVEL II
SUBJECT: 203-COMMERCIAL & INDUSTRIAL LAWS
PART B: INDUSTRIAL LAWS

Q. No. 6.
Describe different kinds of leave entitled to workers in the Labour Act, 2006
[Marks:
15]
Q. No. 7.
(a)
Differentiate between Closures, Strikes and Lockout.
(b)
Discuss the provision of entitlement of benefits if a worker dies while in service.

[Marks: (8+7) = 15]
Q. No. 8.
(a)
Discuss the Garment Factory owners liability to provide children room in the light of the Bangladesh Labour Act
2006.
(b)
What are the deductions to be made from wages as per the BLA 2006?
[Marks: (8+7) = 15]
Q. No. 9.
Discuss provisions of safety and security as per Bangladesh Labour Act, 2006:
(i)
Fire.
(ii)
Heavy Machinery at upper stairs.
(iii)
Crane and Lift.

[Marks: (3 x 5) = 15]
Q. No. 10.
Write short notes on any 4(four) of the following:
(i)
Wages
(ii)
CBA
(iii)
Termination
(iv)
Retrenchment
(v)
Discharge
(vi)
Dismiss
[Marks: (4 x 5) =20]
Page 28 of 55

SUBJECT: 204. TAXATION
Time: Three hours




Marks: 100
Q. No. 1.
Briefly explain the income tax implications in the following cases:
(a) Non-Government Organization;
(b) Public University;
(c) Co-operative Bank; and
(d) Gratuity fund of an International Organization based in Bangladesh.
[Marks: (43) = 12]
Q. No. 2.
(a) What do you mean by Charge of minimum tax as stated under section 16CCC of Income Tax Ordinance,
1984? What is the rate of minimum tax payable and who will pay this? Explain what is meant by receipts as
stated in this section.
(b) State the recent changes and the limit allowed as tax rebate for the CSR activities of a company for the
assessment year 2012-13. What are the new sectors where money can be invested for CSR activities for rebate
purpose with effect from July 1, 2012?
(c)
MPH Companys following information is available with you.
i.
Donated for CSR activities
Tk. 10,000,000 (charged in income statement)
ii.
Profit as per audited statement of accounts Tk.100,000,000.
Compute the tax to be paid by the Company, which is an unlisted industrial company.
[Marks: (53) = 15]
Q. No. 3.
The following items, among others, are debited to profit and loss account of Rose Cement Ltd. for the year ended 30
June 2012:
1. Commission (Brokerage) paid for placing the shares of the Company
Tk. 1,00,000
2. Compensation to forcedly retired official Mr. A. Malek
Tk. 2,00,000
(He is found guilty of improper conduct. He had five years appointment. The
directors agreed to pay him on retirement so that he was got rid of.)
3. Capital expenditure on Hospital for employees of the Company
Tk.20,00,000
4. Trade penalties and law expenses (for infringement of the Customs Law)
Tk. 2,00,000
5. Anticipated loss written off (assuming that the loss might occur)
Tk. 5,00,000
The Directors of the Company invite your opinion as to which items are deductible in computing the total income of the
company for the assessment year 2012-2013.
[Marks: 10]
Q. No. 4.
(a) Define capital assets.
(b) Explain the rate of capital gain tax as per Second Schedule of Income Tax Ordinance, 1984. What is the gain
tax rate on capital gain arising from transfer of shares of Private Limited Company?
(c)
Mr Azam (age 66 years) purchased a machine for his workshop (a proprietorship entity) on 1st August 2009 at
st
Tk. 1,80,000. On 31 March 2012 it was sold. Till that date Tk. 1,20,000 was charged as accounting
depreciation but as per Third Schedule tax depreciation was Tk. 50,000. The Company has not purchased or
st
has not any plan to purchase a similar machine during two years ending 31 March, 2013.
Find out the capital gain if the sales proceed is:
(i)
Tk. 1,50,000
(ii)
Tk. 2,10,000
(iii)
Tk. 2,60,000.
Mr. Azam had income of Tk. 1,50,000 from other heads of income except Capital Gains. Find out tax liability
of Mr. Azam in each of the three cases.
[Marks: (3+3+6) = 12]
Page 29 of 55

Q. No. 5.
Mr. S. Alam is a Cost and Management Accountant in practice. He has the following income for the year ended June
30, 2012.
Taka
1. Share of pre-tax income from CMA partnership firm (Tax duly paid by Firm)
4,99,454
2. Interest income (Gross):
a. Interest income from leasing company
12,27,085*
b. Bank interest on fixed deposit
5,39,380*
c. Bank interest on saving account
49,056*
3. Dividend income (Gross)
6,500*
4. Income from ICMAB as examiner and question setter.
3,07,300
5. Income from Business
58,212
6. Capital gain on sale of shares of a publicly listed company
69,032
7. Income from Government prize bond lottery (Gross)
10,000*
8. He has a house at London, Net house property income was 10,000 pound
(equivalent to BDT 13,00,000). He paid 1000 pound tax at London. He resides
more than 200 days in Bangladesh and he did not remit this income from England
to Bangladesh
9. Income from fisheries
1,00,000
He has the following investment during the year 2011-2012:
Bangladesh sanchyapatra
2,00,000
Life insurance premium
28,200
Secondary shares of Ananda Shipyard and Shipways Ltd.
8,00,000
*Tax has been deducted at source duly.
During the year he has paid Tk. 99,800 as advance tax.
His total net wealth at the end of the income year is Tk. 3,20,55,500.
Compute the total income and tax payable by Mr. S. Alam.
[Marks:
20]
Q. No.6.
ABC Bank Ltd., a bank incorporated in Bangladesh, has submitted the following audited income statement showing
profit before tax of Tk.258,000 for the income year 2011-2012.
You have been provided with the notes supporting the figures to compute the tax liability of the bank for the respective
assessment year:
Particulars
Amount (Tk.)
Amount (Tk.)
Interest income
650,000
Interest paid on deposits and borrowings etc.
200,000
Net interest income
450,000
Income from investments
100,000
Commission, exchange and brokerage
60,000
Other operating income (20+61)
81,000
Total Operating Income (A)
691,000
Less: Operating expenses
Payment to employees
215,000
Postage and telegrams
5,000
Rent, rates and insurance etc.
11,000
Legal charges
2,000
Directors fees
2,000
Auditors fees
1,000
Repairs to premises
60,000
Stationery, printing and advertisement
72,000
Stamps
3,000
Charges on loan losses
5,000
Other expenses of business
15,000
Total Operating Expenses (B)
391,000
Profit/(Loss) Before Provision (C=A-B)
300,000
Provisions:
Specific provision
12,000
General provision
30,000
Total provision (D)
42,000
Total Profit/(Loss) Before Taxes (C-D)
258,000
Page 30 of 55

Q. No.6. (Contd)
Supporting Information:
a. Accounting depreciation charged was Tk. 50,000 whereas tax depreciation is Tk. 80,000
b. Inadmissible expenses have been found as follows:
Perquisites
Tk. 50,000
Printing and Advertisement (capital nature)
40,000
Other expenses (tax is not deducted at sources)
10,000
c. Balance Sheet (extract):
Paid-up Capital
Tk. 2,000,000
Statutory Reserve
750,000
Retained Earnings
250,000
Dividend Equalization Fund
200,000
d. Classification of Loans and Advances:
Unclassified
Tk. 2,100,000
Sub-standard
850,000
Doubtful
1,145,000
Bad/Loss
10,250,000
Income tax authority accepted bad debts as loan losses to
the extent of Tk. 5,000.
e. Entertainment Expenses amounted to Tk. 65,000 for the period.
[Marks: 15]
Q. No. 7.
(a) State the provision of section 17 of the Value Added Tax Act, 1991 regarding self-registration. What are the
procedures of registration under Rule 9 of the Value Added Tax Rules, 1991?
(b) Mention the rate of VAT based on value addition applicable to the following service providers:
(i)
Transport Contractor;
(ii)
Advertising firm;
(iii) Printing Press; and
(iv) Professional Firm.
(c)
Discuss offences and penalties as enacted under section 37 of the Value Added Tax Act, 1991 and under Rules
4 and 35 of the Value Added Tax Rules, 1991.
(d) What are the prohibited goods under the Customs Act, 1969?
(e) What are the elements of a valid gift for gift-tax purpose?
[Marks: (5+2+4+3+2) = 16]
==THE END==
Page 31 of 55

PROFESSIONAL LEVEL-III
SUBJECT: 301.ADVANCED FINANCIAL ACCOUNTING-II.
Time: Three hours


Show all computations.

Full Marks: 100
Question No. 1
On 1 July 2010, Batman Ltd. acquired 80% of the share capital of Robin Ltd. for Tk. 264,800. This was
sufficient for Batman Ltd. to gain control over Robin Ltd. On that date, the balance sheet of Robin Ltd.
consisted of:
Share capital
General reserve
Retained earnings
Liabilities
Cash
Inventories
Land
Plant and equipment
Accumulated depreciation
Trademark
Goodwill
Tk. 250,000
10,000
10,000
180,000
Tk. 450,000
Tk. 35,000
70,000
50,000
300,000
(130,000)
100,000
25,000
Tk. 450,000
All the identifiable assets and liabilities of Robin Ltd. were recorded at fair value except for:
Inventories
Land
Plant and equipment (cost Tk. 300,000)
Trademark
Carrying amount
Tk. 70,000
50,000
170,000
100,000
Fair value
Tk. 80,000
70,000
190,000
110,000
The plant and equipment had a further 5-year life and was expected to be used evenly over that time. The
trademark was considered to have an indefinite life. Any adjustments for differences between carrying
amounts at acquisition date and fair values are made on consolidation.
During the year ended 30 June 2011, all inventories on hand at the beginning of the year were sold, and the
land was sold on 28 February, 2011 to Riddler Ltd. for Tk. 80,000. Any valuation reserve created in relation
to the land was transferred on consolidation to retained earnings.
The income tax rate is assumed to be 30%.
Page 32 of 55

Question No. 1.(contd.)
The summarized income information of Batman Ltd. and Robin Ltd. for the year ended 30 June 2011 is as
shown below:
Sales revenue
Other income
Cost of sales
Other expenses
Profit before tax
Income tax expense
Profit
Retained earnings (01.07.2010)
Transfer from general reserve
Interim dividend paid
Final dividend declared
Retained earnings (30.06.2011)
Batman
Tk. 200,000
85,000
285,000
162,000
53,000
215,000
70,000
20,000
50,000
30,000
-80,000
12,000
6,000
18,000
Tk. 62,000
Robin Ltd.
Tk. 172,000
35,000
207,000
128,000
31,000
159,000
48,000
18,000
30,000
10,000
8,000
48,000
10,000
4,000
14,000
Tk. 34,000
Of the interim dividend paid by Robin Ltd. in the current year, Tk. 5,000 was from profits earned before
acquisition date. All other dividends were from the current years profits.
During the current year, Robin Ltd. sold a quantity of inventory to Batman Ltd. for Tk. 8,000. The original
cost of these items to Robin Ltd. was Tk. 5,000. One-third of this inventory was still on hand at the end of
the year.
On 31 March 2011, Robin Ltd. transferred an item of Plant with a carrying amount of Tk. 10,000 to Batman
Ltd. for Tk. 15,000. Batman Ltd. treated this item as inventory. The item was still on hand at the end of the
year. Robin Ltd. applied a 20% depreciation rate to this type of plant.
Required:
(a)
Prepare the consolidation worksheet entries necessary for preparation of the consolidated financial
statements for Batman Ltd. and its subsidiary for the year ended 30 June, 2011.
(b)
Prepare the consolidated income statement.

[Marks: (25+10) = 35]
Page 33 of 55

Question No. 2.
Sun-Moon Ltd. operates its Home Office in Dhaka and a Branch at Chittagong. Trial Balance prepared on
31st December, 2010 revealed the following position:
Home Office
Branch Office
Dr.
Cr.
Dr.
Cr.
Cash
28,175
7,000
Accounts Receivable
99,750
47,250
Merchandise Inventory
110,250
50,400
Furniture
29,750
12,600
Accumulated Depreciation Furniture
8,750
1,890
Store Supplies
3,290
2,030
Branch Current A/c
110,160
Accounts Payable
122,897
14,700
Home Office Current A/c
106,190
Common Stock (Tk. 10 each)
227,500
Retained Earnings
23,975
Sales
148,228
63,000
Shipment to Branch
35,700
Purchases
87,850
14,350
Shipment from Home Office
29,750
Advertising Expense
9,975
2,800
Freight-in
6,475
3,675
Salary Expense
14,875
8,225
Rent Expense
9,450
5,250
Insurance Expense
9,100
2,450
543,075
543,075
185,780
185,780
Additional Information:
(i) Ending Merchandise Inventory:
Cost(Tk.)
Market Price(Tk.)
Home Office
84,700
85,700
Branch Office
61,100
51,100
(ii) Store Supplies on Hand - Home Office Tk. 1,330
Branch Office Tk. 1,050
(iii) Accrued Salary Expense - Home Office Tk. 910
Branch Office Tk. 400
(iv) Depreciation on Furniture @ 10%
Required:
(a) Income Statement in Columnar Form
(b) Consolidated Balance Sheet of the Company
(c) Working notes for Combined Financial Statement of Head Office and Chittagong Branch of the
Sun-Moon Ltd. for 31st December, 2010.
[Marks: (6+10+6) = 22]
Page 34 of 55

Question No. 3.
Set out below are extracts from the Statement of Financial Position as at 31/10/11 of Quantum Ltd and
extracts from the Statements of Income for the companys first two years of trading.
Balance Sheet "extract" of Quantum Ltd
Equity
Ordinary share capital[ Nominal value Tk. 0.25]
Share Premium
Revaluation reserve
Profit brought forward 31/10/11
Total Equity
Non Current Liabilities
10% Convertible Loan notes
8% Redeemable Preference Shares
Income statement extract for years ended
Profit before interest and tax
Less Loan interest
Less Redeemable Preference dividend
Profit before taxation
Less Taxation
Profit for the year
Less Ordinary Dividends
Profit Retained
31/10/11
Tk. 250,000
Tk. 350,000
Tk. 85,000
Tk. 20,000
Tk. 705,000
Tk. 125,000
Tk. 260,000
Tk. 385,000
31/10/12
Tk.125,000
(Tk.12,500)
(Tk.20,800)
Tk. 91,700
(Tk.28,900)
Tk. 62,800
(Tk.10,000)
Tk. 52,800
31/10/11
Tk. 74,300
(Tk.12,500)
(Tk.20,800)
Tk. 41,000
(Tk.16,000)
Tk. 25,000
Tk. 5,000)
Tk.20,000
Notes.
(i) On the 1st of May 2012 the company made a bonus issue of one share for every four shares held
(ii) On the 31/07/12 the company made a rights issue of one share for every five shares held. The issue
price was Tk.0.70 per share and the market value of the share at the date of issue was Tk.1.40 per share
(iii) The terms of conversion of the loan notes were as follows:
(a) From 2014 to 2018 100 ordinary shares for every Tk.100 of loan stock
(b) From 2019 forward 100 ordinary shares for every Tk.130 of loan stock
(iv) The rate of corporation tax is 20%
Required
(a) Calculate the basic Earnings per Share (EPS) for 2012 including the comparative EPS for 2011 that
would be shown in the financial statements for year 2012.
(b) Calculate the diluted EPS for 2012
(c) Explain briefly the importance of the P/E ratio
Show any EPS, or diluted EPS to THREE decimal places
[Marks: (8+6+6) = 20]
Page 35 of 55

Question No. 4.
(a)
What are share options? How would they be disclosed in a Companys balance sheet?
(b)
Kurashiki Ltd. Sasebo Ltd. and Kanzawa Ltd. each own 33% of the ordinary shares that carry voting
rights at a general meeting of shareholders of Saga Ltd. Kurashiki Ltd., Sasebo Ltd. and Kanzawa Ltd.
each have the right to appoint two directors to the board of Saga Ltd. Kurashiki Ltd. also owns call
options that are exercisable at a fixed price at any time and if exercised would give it all the voting
rights in Saga Ltd. The management of Kurashiki Ltd. does not intend to exercise the call options,
even if Sasebo Ltd. and Kanzawa Ltd. do not vote in the same manner as Kurashiki Ltd.
Discuss whether Saga Ltd. is a subsidiary of any of the other entities.

(c)
In February 2008, Sigma Ltd. issued to existing shareholders 36,000 options to buy 36,000 ordinary
shares. Each option costs Tk.5.00 and entitles the holder to one ordinary share in Sigma Ltd. at a price
of Tk.15.00 per share, exercisable between November 23, 2011 and December 20, 2011. Options not
exercised by December 20, 2011 will lapse.
Prepare journal entries.
(d)
BAS-27 implicitly adopts the entity concept of consolidation. However, it is argent that the standard
letter were taking the entity concept without giving consideration to the objections of consolidated
financial statements.
Required:
(i)
(ii)
What are the main objectives of preparing consolidated financial statements?

How would the choice of objectives affect the adoption of particular concepts of consolidation?
[Marks: (6+5+6+6) = 23]
= THE END =
Page 36 of 55

SUBJECT: 302. ADVANCED COST ACCOUNTING
Time: Three hours
Full Marks: 100




Q. No. 1.
(a) What is the purpose of a cost of production report?
(b) Distinguish between normal (unavoidable) spoilage and abnormal (avoidable) spoilage.
(c)
Explain how normal and abnormal spoilage should be reported for management purpose.
(d) Padma Incorporation produces antibiotic product in its three producing departments. The following quantitative
and cost data have been made available:
Department
Production data:
Blending
Testing
Terminal
Started into production
8000kg
5400kg
3200kg
Transferred to next dept.
5400
3200
-----Transferred to finished goods
--------2100
In process(100% materials, 1/3 labor and overhead)
2400
1800
----In process(100% materials, 2/3 labor and overhead)
--------900
Cost charged to departments:
Materials
Tk. 20670
Tk. 7980
Tk. 14400
Labor
Tk. 11160
Tk. 5016
Tk. 11520
Factory overhead
Tk. 5580
Tk. 2280
Tk. 5040
Total
TK. 37410
Tk.15276
Tk. 30960
Lost units are normal and apply to all production.
Required:
(i)
Prepare a quantity schedule for each of the three departments.
(ii)
Prepare an equivalent production schedule for each of the three departments
(iii) Compute the unit cost of factory overhead in the Blending Department.
(iv) Compute the lost unit cost adjustment in the Testing Department if the unit cost transferred in from the Blending
Department is Tk.5.35
[Marks: {2+2+2+(4+4+3+3)} = 20]
Q. No. 2.
(a) What is target costing? How do target costs enter into pricing decision?
(b) Falcon Incorporation is considering the introduction of new product. To determine a target selling price, the
company has gathered the following information:
Number of units to be produced and sold each year
14,000 units
Unit product cost
Tk. 25
Projected annual selling, general and administrative expenses
Tk. 50,000
Estimated investment required by the company
Tk. 750,000
Desired return on investment (ROI)
Tk. 12%
The company uses the absorption costing approach to cost-plus pricing
Requirement:
(i)
Compute the markup the company will have to use to achieve the desired ROI.
(ii)
Compute the target selling price per unit.
(c)
The Reliable TV Repair Shop had budgeted the following costs for next year:
Repair Technicians:
Wages
Tk. 120,000
Fringe benefits
Tk. 30,000
Selling, administrative and other costs of the repairs operation
Tk. 90,000
Materials:
Cost of ordering, handling and storing parts
Tk. 20% of invoice cost.
In total, the company expects 10,000 hours of repair time it can bill to customers. According to competitive
conditions, the company believes it should aim for a profit of Tk. 6.00 per hour of repair time. The competitive
markup on materials is 40% of invoice cost. The company uses time and material pricing.
Requirement:
(i)
Compute the time rate and the materials loading charge that would be used of bill jobs.
(ii)
One of the companys repair technicians has just completed a repair job that required 2.5 hours of time
and Tk. 80 in parts (invoice cost). Compute the amount that would be billed for the job.
[Marks: {4+(4x2)+(4x2)} = 20]
Page 37 of 55

Q. No. 3.
(a) Reebok manufactures cricket bats using high quality wood and skilled labour using mainly traditional manual
techniques. The manufacturing department is a cost centre within the business and operates a standard costing
system based on marginal costs.
At the beginning of April 2012 the production director attempted to reduce the cost of the bats by sourcing wood
from a new supplier and de-skilling the process a little by using lower grade staff on parts of the production
process. The standards were not adjusted to reflect these changes.
The variance report for April 2010 is shown below (extract).
Adverse
Favourable
Variances
Tk.
Tk.
Material price
5,100
Material usage
7,500
Labour rate
43,600
Labour efficiency
48,800
Labour idle time
5,400
The production director pointed out in his April 2012 board report that the new grade of labour required
significant training in April and this meant that productive time was lower than usual. He accepted that the
workers were a little slow at the moment but expected that an improvement would be seen in May 2010. He also
mentioned that the new wood being used was proving difficult to cut cleanly resulting in increased waste levels.
Sales for April 2012 were down 10% on budget and returns of faulty bats were up 20% on the previous month.
The sales director resigned after the board meeting stating that Reebok had always produced quality products
but the new strategy was bound to upset customers and damage the brand of the business.
Required:
Assess the performance of the production director using all the information above taking into account both the
decision to use a new supplier and the decision to de-skill the process.
(b)
In May 2012 the budgeted sales were 19,000 bats and the standard cost card is as follows:
Std cost
Std cost
Tk.
Tk.
Materials (2kg at Tk. 5/kg)
10
Labour (3hrs at Tk. 12/hr)
36
Marginal cost
46
Selling price
68
Contribution
22
In May 2012 the following results were achieved:
40,000kg of wood were bought at a cost of Tk. 196,000, this produced 19,200 cricket bats. No inventory of raw
materials is held. The labour was paid for 62,000 hours and the total cost was Tk. 694,000. Labour worked for
61,500 hours.
The sales price was reduced to protect the sales levels. However, only 18,000 cricket bats were sold at an
average price of Tk. 65.
Required:
Calculate the materials, labor and sales variances for May 2012 in as much detail as the information allows. You
are not required to comment on the performance of the business.
[Marks: (7+13) = 20]
Q. No. 4.
Zara Fashions produces clothes for the teenage market. The design department is currently working on two potential
product lines: evening wear and country wear. The marketing department is keen to introduce both, but currently the
company has only enough surplus production capacity to introduce one new product line. Both product lines are
estimated to have a life cycle of three yearsone year for design and development and two years on the retail
market. The company accountant reviewed the budget estimates for both of the product lines and estimated their
profitability for each year in the retail market as follows:
Evening wear
C ou n t r y w e ar
Sales revenue
Tk.350,000
Tk.650,000
Cost of goods sold
250,000
450,000
Gross margin
Tk.100,000
Tk.200,000
The marketing manager, whose performance is evaluated on sales, is keen to introduce the country wear and uses the
profitability analysis to support this view. However, the company accountant is concerned about some of the other costs
he has uncovered. The evening wear will be sold in a limited, exclusive market and involve relatively little promotion
and distribution cost. In contrast, the country wear, a higher volume line, will be distributed to a large number of retailers
and require substantial support costs.
Page 38 of 55

Q. No. 4.(Contd.)
Design costs*
Tk.20,000
Tk.100,000
Promotion costs**
4,000
40,000
Distribution **
6,000
120,000
Tk.30,000
Tk.260,000
*
These costs are to be incurred in the year prior to the products' release on the market.
**
These costs will be spread equally over the two years in which the products are sold.
Required:
(a)
Which product line appears more profitable, using the conventional profitability analysis?
(b) Prepare a profit statement for each product line for each of the three years of the life cycle. Which product appears
to be the more profitable now? Why?
(c)
If Zara Fashions uses a cost-plus pricing system, which approach to costinglife cycle costing or conventional
costingwould be more useful in setting product prices? Explain your answer.
(d) Outline some more information that you might need to undertake a complete profitability analysis for the two product
lines.
[Marks: (5+7+3+5) = 20]
Q. No. 5.
(a) Philips Co assembles and sells many types of radio. It is considering extending its product range to include
digital radios. These radios produce a better sound quality than traditional radios and have a large number of
potential additional features not possible with the previous technologies (station scanning, more choice, one
touch tuning, station identification text and song identification text etc).
A radio is produced by assembly workers assembling a variety of components. Production overheads are
currently absorbed into product costs on an assembly labour hour basis.
Philips Co is considering a target costing approach for its new digital radio product.
Required: Briefly describe the target costing process that Philips Co should undertake.
(b) Airport Services Ltd operates the check-in facilities at domestic and international terminals. During the month of
October the following costs were incurred as passengers were processed by the Check-in Department at
Tullamarine Airport:
International terminal Domestic terminal
Costs:
Tk.
Tk.
Managers' and supervisors' salaries
10,000
15,000
Check-in staff salaries
7,500
25,000
Depreciation on baggage handling equipment
16,300
32,000
Boarding passes, baggage tags and other consumables
500
1,400
Depreciation on computer hardware and software
5,000
17,000
Equipment insurance
500
1,300
Rent (allocated per square metre)
1,000
4,000
Electricity
1,200
3,300
Number of passengers processed
3,500
11,000
Required:
(a)
Calculate the cost per check-in at the international and domestic terminal.
(b)
Why does the cost per check-in differ between the two terminals?
(c)
Do these costs provide a reliable estimate of the costs incurred to check in each passenger at the
international and domestic terminals? Explain your answer.
(d)
How might the management of Airport Services Ltd use this information?
[Marks: {5+(4+3+4+4)} = 20]
=THE END=
Page 39 of 55

SUBJECT: 303-CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES
Time: Three hours
Marks: 100
Answer
SIX
questions
taking
any
THREE
from
each
Part
including
compulsory
question
No. 5
*
and 10.
*
*
PART-A: CORPORATE LAWS

Q. No. 1.
(a) The Board of Directors of Golden Star Limited met only three times in the previous year. A fourth meeting was
adjourned twice for lack of quorum. Discuss whether provisions of the Companies Act have been contravened.
(b)
Why quorum is necessary? Explain.

[Marks: (8+7) = 15]
Q. No. 2.
(a)
A promoter is not a trustee or agent of the company but he stands in a fiduciary position towards it. Comment.
(b)
Explain the procedures for incorporation of a Public Limited Company and briefly describe the various
documents that are to be field with the Registrar of Joint Stock Companies and Firms at the time of
incorporation.
[Marks: (8+7) = 15]
Q. No. 3.
(a)
Can the Board of Directors grant leave of absence to a Director for any number of consecutive meetings?
Explain.
(b)
When does the resignation of a Director become effective?

[Marks: (8+7) = 15]
Q. No. 4.
(a)
Write a procedure for appointment of an Independent Director.
(b)
What are the rights and obligation of an Independent Director?

[Marks: (8+7) = 15]
Q. No. 5.
Write short notes on any four of the following:
(a)
Prospectus
(b)
Stock Dividend
(c)
Managing Agent
(d)
Floating Charges
(e)
Mutual Fund
(f)
Asset Management.
[Marks: (4 x 5) = 20]
Page 40 of 55

SUBJECT: 303-CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES
PART-B: CORPORATE GOVERNANCE & SECRETARIAL PRACTICES
Q. No. 6.
It is often said that the Board of Directors of a Company has a pivotal position in the structure of corporate governance
and good corporate governance dictates that the Board of Directors should be comprised of individuals with certain
personal characteristics and competencies such as recognition of the importance of the Boards tasks, integrity, a
sense of accountability, track record of achievements, and the ability to ask tough questions. Besides, having financial
literacy, experience, leadership qualities and the ability to think strategically, the directors must show significant
degree of commitment to the company and devote adequate time for meeting, preparation and attendance.
(a)
How, in your view, competencies of Directors be judged?
(b)
What yardsticks be applied in the selection of Board Members?
(c)
Can competence of Directors be enhanced by training?

[Marks: (3 x 5) = 15]
Q. No. 7.
(a)
A Company Secretary is an eye witness to the Board. Do you agree with the statement? Explain in details.
(b)
Discuss the role of the Company Secretary in Corporate Governance.

[Marks: (7+8) = 15]
Q. No. 8.
Comment on any three of the following:
(a)
Audit Committee is more of a formality than an independent regulator.
(b)
Insider trading is permissible with the consent of the SEC.
(c)
Government regulations and public policy tend to bring the bare minimum involvement of corporate bodies
towards their corporate responsibilities.
(d)
The matters required to be included in the directors responsibility statement are to be included in the directors
report.
[Marks: (3 x 5) = 15]
Q. No. 9.
Energy Power Generation Ltd. is contemplating setting-up of an Audit Committee as part of good Corporate
Governance. As a Company Secretary of the company, advise the company on the constitution, composition, quorum
and the role of audit committee.
[Marks:
15]
Q. No. 10.
Write short notes on any four of the following:
(a)
CSR;
(b)
Proxy;
(c)
Form IX;
(d)
Price sensitive information;
(e)
Resolution by Circulation.
[Marks: (4 x 5) = 20]
= THE END =
Page 41 of 55

SUBJECT: 304. AUDITING
Time: Three hours




Full Marks: 100
Q. No. 1.
(a) What do you understand by professional and ethical issues that may arise during an audit
engagement?
(b) Explain the purpose of laws, standards and other requirement relating to audit work.
(c) What are the responsibilities of an auditor regarding fraud under BSA-240?
[Marks: (3+4+3) = 10]
Q. No. 2.
(a) Define nature of Audit and briefly describe the Audit Strategy.
(b) Define audit plan and describe why it is so important that auditors should plan his audit work. You
also describe the matters that will consider in planning the audit.
(c) While planning the audit of Shouvik Limited for the year ended 30th June, 2012 the Finance Director
informed you that the company had introduced an incentive scheme under which the Directors are
entitled to a incentive bonus on achieving a certain level of profit and this incentive will be paid after
30 days of audited accounts are available. Do you think there are involve any audit risk and write how
you would address these risks?
[Marks: (4+5+5) = 14]
Q. No. 3.
(a) What do you understand by the term going concern?
(b) Briefly describe how you would as an auditor, evaluate managements assessment of the entitys
ability to continue as a going concern.
(c) Write four examples of events or conditions which individually or collectively may cast significant
doubt about the going concern assumption.
(d) What are the responsibilities of an auditor in regards to going concern assumption?
[Marks: (3+4+4+4) = 15]
Q. No. 4.
(a) Explain the concept of materiality. Describe how materiality affects the audit work performed by
auditors. Give an example of qualitative materiality.
(b) The framing of an audit program may be affected by the degree of internal control which is in
operation. Explain.
(c) An auditor is expected to have an absolute basis for the expression of an opinion, Do you agree?
Why or why not?
[Marks: (7+4+4) = 15]
Page 42 of 55

SUBJECT: 304. AUDITING
Q. No. 5.
(a) Auditors normally express his audit opinion by reference to the true and fair view, which is an
expression of reasonable assurance. Briefly define the terms true and fair.
(b) What are the key treats to independence of auditor?
(c) As an auditor of a company what steps will you take to overcome and reduce the treats during the
course of your audit?
[Marks: (5+5+6) = 16]
Q. No. 6.
(a) What is sampling risk? Explain the importance of Audit Sampling.
(b) You are the audit manager for ABC & Co. One of your new clients this year is Data soft Ltd., a
company having net assets of Tk. 150 million. The audit work has been completed, but there is one
outstanding matter that you are investigating; the directors have decided not to provide depreciation
on building in the financial statement, although Bangladesh Accounting Standard suggests that
depreciation should be provided.
Required:
State the additional audit procedures and actions you should now take in respect of above matter.
(c) State the effect on your audit report of the following alternative situations:
(i)
Depreciation had not been provided on any non-current asset for a number of years, the effect
of which if corrected would be to turn an accumulated profit into a significant accumulated loss.
(ii) XYZ & Co was appointed auditors after the end of the financial year of Northern Co. Ltd.
Consequently, the auditors could not attend the yearend inventory count. Inventory is material to
the financial statements.
[Marks: (5+4+6) = 15]
Q. No. 7.
(a) As an Auditor, comment on the following:
(i)
Company has debited Tk. 1,75,000 to Delivery Van Account received from a customer against
credit sales of Tk. 1,50,000 to him who is now unable to pay the amount. The Delivery Van has
not been registered in the name of the company with BRTA till date of Finalization of accounts.
(ii) AB & Associates the Auditor of Ajanta Ltd. refused to deliver the Books of account of the
company, which were given to them for the purpose of audit, as the audit fees is not paid to
them in full.
(b) How would you verify the following?
(i)
Reduction in share capital;
(ii)
Inventory;
(iii)
Impairment Loss.
[Marks: (3+3+3+3+3) = 15]
=THE END=
Page 43 of 55

PROFESSIONAL LEVEL-IV
SUBJECT: 401. FINANCIAL MANAGEMENT
Time: Three hours




Marks: 100
Q. No. 1.
Explain the following statements:(a) There is a trade-off between risk and return.
(b) Investment is well-grounded and carefully planned speculation.
(c)
Financial risk is a function of financial leverage.
(d) The single index model results in a substantial reduction in inputs required for portfolio analysis.
(e) CAPM postulates the nature of the relationship between the expected return and the systematic risk of a
security.
[Marks: (5 4) = 20]
Q. No. 2.
(a) Find the duration of a 6 percent coupon bond with a face value of Tk.1000 making annual interest payments if it
has 5 years until maturity. The bond is redeemable at a 5 percent premium at maturity. The market interest rate
is currently 8 percent.
(b) Information regarding two mutual funds and a market index are given below:Fund
Return Percent
Standard Deviation (percent)
Market index
Gold
7
15
0.72
Platinum
16
35
1.33
Market index
10
24
1.00
Assuming the risk-free return as 5 percent calculate:
(i)
The differential return for the two funds.
(ii)
Calculate the net selectivity measure for the Platinum Fund using Famas framework of performance
components.
[Marks: (10+10) = 20]
Q. No. 3.
You are the Financial Analyst and hired by the Wolverine Corp., a US Company. It currently has no existing business
in New Zealand but is considering establishing a subsidiary there. The following information has been gathered and
provided to you for assessing this project:
The initial investment required is $50 million in New Zealand dollars (NZ$). Given the existing spot rate of $0.50
per New Zealand dollar, the initial investment in U.S. dollars is $25 million. In addition to the NZ$50 million initial
investment for plant and equipment, NZ$20 million is needed for working capital and will be borrowed by the
subsidiary from a New Zealand bank. The New Zealand subsidiary will pay interest only on the loan each year, at
an interest rate of 14 percent. The loan principal is to be paid in 10 years.
The project will be terminated at the end of Year 3, when the subsidiary will be sold.
The price, demand, and variable cost of the product in New Zealand are as follows:
Year
Price
Demand
Variable Cost
1
NZ$500
40,000 units
NZ$30
2
NZ$511
50,000 units
NZ$35
3
NZ$530
60,000 units
NZ$40
The fixed costs, such as overhead expenses, are estimated to be NZ$6 million per year.
The exchange rate of the New Zealand dollar is expected to be $0.52 at the end of Year 1, $0.54 at the end of
Year 2, and $0.56 at the end of Year 3.
The New Zealand government will impose an income tax of 30 percent on income. In addition, it will impose a
withholding tax of 10 percent on earnings remitted by the subsidiary. The U.S. government will allow a tax credit
on the remitted earnings and will not impose any additional taxes.
All cash flows received by the subsidiary are to be sent to the parent at the end of each year. The subsidiary will
use its working capital to support ongoing operations.
Page 44 of 55

Q. No. 3. (Contd.)
The plant and equipment are depreciated over 10 years using the straight-line depreciation method. Since the
plant and equipment are initially valued at NZ$50 million, the annual depreciation expense is NZ$5 million.
In three years, the subsidiary is to be sold. Wolverine plans to let the acquiring firm assume the existing New
Zealand loan. The working capital will not be liquidated but will be used by the acquiring firm when it sells the
subsidiary. Wolverine expects to receive NZ$52 million after subtracting capital gains taxes. Assume that this
amount is not subject to a withholding tax.
Wolverine requires a 20 percent rate of return on this project.
Required:
(i)
Determine the net present value of this project. Should Wolverine accept this project?
(ii)
Assume that Wolverine is also considering an alternative financing arrangement, in which the parent would
invest an additional $10 million to cover the working capital requirements so that the subsidiary would avoid the
New Zealand loan. If this arrangement is used, the selling price of the subsidiary (after subtracting any capital
gains taxes) is expected to be NZ$18 million higher. Is this alternative financing arrangement more feasible for
the parent than the original proposal? Explain.
(iii) From the parents perspective, would the NPV of this project be more sensitive to exchange rate movements if
the subsidiary uses New Zealand financing to cover the working capital or if the parent invests more of its own
funds to cover the working capital? Explain.
(iv) Assume Wolverine used the original financing proposal and that funds are blocked until the subsidiary is sold.
The funds to be remitted are reinvested at a rate of 6 percent (after taxes) until the end of Year 3. How is the
projects NPV affected?
(v)
What is the break-even salvage value of this project if Wolverine uses the original financing proposal and funds
are not blocked?
(vi) Assume that Wolverine decides to implement the project, using the original financing proposal. Also assume
that after one year, a New Zealand firm offers Wolverine a price of $27 million after taxes for the subsidiary and
that Wolverines original forecasts for Year 2 and 3 have not changed. Compare the present value of the
expected cash flows it Wolverine keeps the subsidiary to the selling price. Should Wolverine divest the
subsidiary? Explain.
[Marks: (7+6+2+3+4+3) = 25]
Q. No. 4.
A newly formed company has applied for a short-term loan for financing its working capital requirements. As a
financial analyst you are requested by the bank to prepare a projection of the requirements of working capital for the
company applied for. Add 10% to your estimated figure to cover unforeseen events. The information about the
projected income statement of the company is given below:
Amount (Tk.)
Sales
21,00,000
Less : Cost of goods sold
15,30,000
Gross Profit
5,70,000
Less:
Selling & Administrative Expenses
2,70,000
Profit before Tax
3,00,000
Less: Provision for Tax
1,00,000
Profit after Tax
2,00,000
Cost of goods sold has been derived as follows:
Material used
8,40,000
Plus : Wages & Manufacturing Expenses
6,25,000
Plus: Depreciation
2,35,000
17,00,000
Less: Stock of finished goods
1,70,000
(10% of goods produced not yet sold)
15,30,000
Page 45 of 55

Q. No. 4. (Contd.)
The figures given above relate only to the goods that have been finished and not to those in process. Goods equal to
15 per cent of the years production (in terms of physical units) are in process, requiring on an average, full materials
but only 40 per cent of the other expenses. The company believes in keeping two months consumption of material in
stock.
All expenses are paid one month in arrear; suppliers of material extend 1.5 months credit; sales are at 20 per cent
cash and the rest at two months credit; 70 per cent of the income tax has to be paid in advance in quarterly
installments. You can make other such assumptions as you deem necessary for projecting the working capital
requirement.
[Marks: 18]
Q. No. 5.
The total values (equities and debt) of two companies PENDEN and TULEN are expected to fluctuate according to the
state of economy.
Economic State
Recession Slow growth Rapid growth
Probability
0.15
0.65
0.20
Total values:
Penden (Tk. in million )
42
55
75
Tulen (Tk. in million )
63
80
120
Penden currently has Tk.45 million of debt and Tulen Tk.10 million of debt. Recently the directors of the two
companies have met to consider the possibility of a merger.
Required:
(a) If the two companies were to merge and assuming that no operational synergy occurs as a result of merger,
calculate the expected value of debt and equity of the merged company. Explain the reason for any differences
that exist form the expected values of debt and equity if they do not merge.
(b) Discuss the advantages and disadvantages of growth by agreed acquisition or merger as compared with growth
by internal (or organic) investment.
[Marks: (9+8) = 17].
==THE END==
Page 46 of 55

SUBJECT: 402.STRATEGIC MANAGEMENT ACCOUNTING.
Time: Three hours
Full Marks: 100


Show all computations.

Question No. 1.
(a) Explain why it is considered to distinguish between performance of a business unit manger and
performance of a business unit. Provide two examples to illustrate your answer?
(b) According to throughput accounting, how should performance be measured at the operational level?
What advantages and disadvantages do these measures offer?
(c) What is meant by a post-completion audit of an investment project? Why do so few businesses
complete post-completion audits of their capital expenditure decisions?
[Marks: (5+5+5) = 15]
Question No. 2.
Several companies, which had engaged in significant amounts of trade with each other for over a decade,
merged to form Canarias Group Ltd. in early 2011. Each company within the group operates as an
autonomous profit centre and, because of the significant amount of intra-group transactions, the Groups
Financial Controller is anxious to devise appropriate rules governing the transfer prices attached to such
transactions.
Required:
(a) Explain the consequences for Canarias Group Ltd. of requiring transfer prices to be based on the full
cost of goods transferred plus a mark-up. Use the following example of a possible transaction between
two of the companies within the group to illustrate your answer:
LZ Ltd. has spare production capacity which could be used to manufacture 12,500 units of a
component (which cannot be bought or sold outside Canarias Group Ltd.) each month. The
variable cost of production would be Tk.27 per unit, and LZ Ltd. estimates that the fixed costs
associated with this production capacity amount to Tk.100,000 per month.
By using one unit of the component produced by LZ Ltd. and incurring additional variable costs
of Tk.15 per unit, TR Ltd. could manufacture a product which it could sell for Tk.60 per unit.
Tenerife Ltd. has plenty of spare production capacity.
LZ Ltd. argues that the transfer price of components sold to other companies within the Canarias
Group Ltd. should be calculated as full cost of production plus a 40% mark-up, which is the
formula applied in determining selling prices of products sold to external customers.
(b) Assume now that the Financial Controller of Canarias Group Ltd. is considering introducing a rule that
transfer price should be based on the marginal cost of production up to the point of making the transfer
plus the opportunity cost associated with making the transfer.
Using the above example of LZ Ltd. and TR Ltd., explain why this rule would not necessarily result in
behaviour by those two companies which is optimal for Canarias Group Ltd. as a whole.
Page 47 of 55

Question No. 2.(contd..)
(c) Outline two other transfer pricing rules and explain why they may be more satisfactory for Canarias
Group Ltd. than the rules applied in your answers to the previous parts of this question. Your answer to
this part should include explanations of the advantages and disadvantages of these two other transfer
pricing rules, and indications of the steps which Canarias Group Ltd. could take in order to minimize
the impact of the disadvantages.
[Marks: (6+5+14) = 25]
Question No. 3.
PV Co is evaluating an investment proposal to manufacture Product W33, which has performed well in test
marketing trials conducted recently by the companys research and development division. The following
information relating to this investment proposal has now been prepared.
Initial investment
Tk. 2 million
Selling price (current price terms)
Tk. 20 per unit
Expected selling price inflation
3% per year
Variable operating costs (current price terms)
Tk. 8 per unit
Fixed operating costs (current price terms)
Tk. 170,000 per year
Expected operating cost inflation
4% per year
The research and development division has prepared the following demand forecast as a result of its test
marketing trials. The forecast reflects expected technological change and its effect on the anticipated lifecycle of Product W33.
Year
1
2
3
4
Demand (units)
60,000
70,000
120,000
45,000
It is expected that all units of Product W33 produced will be sold, in line with the companys policy of
keeping no inventory of finished goods. No terminal value or machinery scrap value is expected at the end
of four years, when production of Product W33 is planned to end. For investment appraisal purposes, PV Co
uses a nominal (money) discount rate of 10% per year and a target return on capital employed of 30% per
year. Ignore taxation.
Required:
(a) Calculate the following values for the investment proposal:
(i) net present value;
(ii) internal rate of return;
(iii) return on capital employed (accounting rate of return) based on average investment; and
(iv) discounted payback period.
(b) Discuss your findings in each section of (a) above and advise whether the investment proposal is
financially acceptable.
(c) NPV should not be used for analyzing projects that have strategic significance for the business, as this
method cannot take strategic factors into account. Do you agree? Explain.
[Marks: (13+4+3) = 20]
Page 48 of 55

Question No.4.
HP Corporation manufactures various types of color laser printers in a highly automated
facility with high fixed costs. The market for laser printers is competitive. The various color
laser printers on the market are comparable in terms of features and price. HP believes that
satisfying customers with products of high quality at low costs is key to achieving its target
profitability. For 2011, HP plans to achieve higher quality and lower costs by improving
yields and reducing defects in its manufacturing operations. HP will train workers and
encourage and empower them to take the necessary actions. Currently a significant amount
of HPs capacity is used to produce products that are defective and cannot be sold. HP
expects that higher yields will reduce the capacity that HP needs to manufacture products.
HP does not anticipate that improving manufacturing will automatically lead to lower costs
because HP has high fixed costs. To reduce fixed costs per unit, HP could lay off employees
and sell equipment, or it could use capacity to produce and sell more of its current products
or improved models of its current products. HPs balanced scorecard (initiatives omitted) for
the just-completed fiscal year 2011follows:
Target
Actual
Objectives
Measures
Performance
Performance
Financial Perspective
Increase shareholder value
Operating-income changes
from productivity
Tk. 1,000,000
Tk. 400,000
improvements
Operating-income changes
Tk. 1,500,000
Tk. 600,000
from growth
Customer Perspective
Increase market share
Market share in color laser
5%
4.6%
printers
Internal-Business-Process
Perspective
Improve manufacturing quality Yield
82%
85%
Reduce delivery time to
Order-delivery time
25 days
22 days
customers
Learning-and-Growth
Perspective
Develop process skills
Percentage of employees
trained in process and quality
92%
90%
management
Enhance information-system
Percentage of manufacturing
85%
87%
capabilities
processes with real-time
feedback
Page 49 of 55

Required:
(a) Was HP successful in implementing its strategy in 2011? Explain.
(b) Is HPs balanced scorecard useful in helping the company understand why it did not reach its
target market share in 2011? If it is, explain why. If it is not, explain what other measures
you might want to add under the customer perspective.
(c) Would you have included some measure of employee satisfaction in the learning-and-growth
perspective and new-product development in the internal-business-process perspective? That
is, do you think employee satisfaction and development of new products are critical for HP to
implement its strategy? Why or why not? Explain briefly.
(d) What problems, if any, do you see in HP improving quality and significantly downsizing to
eliminate unused capacity?
[Marks: (5+5+5+5) = 20]
Question No. 5.
Navarre Ltd. is a divisionalised company. Decisions about bonuses and promotions for Divisional Managers
are at the discretion of the companys Directors, but are significantly influenced by each divisions return on
investment (ROI). For the purposes of ROI calculations, fixed assets are measured at their net book value at
the end of the financial year.
The following forecasts are available for the companys three divisions for the year ended 31st December
2010:
Sales
Net profit Capital at 31st December
Division A:
Tk.600,000
Tk.125,000
Tk.1,100,000
Division B:
Tk.500,000
Tk. 80,000
Tk. 900,000
Division C:
Tk.200,000
Tk. 37,000
Tk. 210,000
After the above forecasts were prepared, one possible extra project was identified for each division. These
projects would commence on 1st January 2010, and each Divisional Manager must decide by that date as to
whether or not to accept his or her divisions possible extra project. Details of these possible extra projects
(which would continue for several years if accepted) are as follows:
Division A could increase its market share. This would result in extra sales of Tk.160,000 in 2010 and
Tk.200,000 in each subsequent year. The profit margin on sales would be 19%. The only additional
investment required would be an increase of Tk.225,000 in the divisions working capital for the
duration of the project.
Division B could invest Tk.200,000 in new technology which would improve the productivity of the
divisions manufacturing facilities. This extra investment would be depreciated on a straight-line basis
over an 8-year life, and an additional investment of Tk.60,000 in the divisions working capital would
also be required for the duration of the project. The productivity improvement would result in
increased sales of Tk.130,000 in 2010 and Tk.140,000 in each year thereafter. The profit margin on
sales would be 30%, before taking account of depreciation.
Page 50 of 55

Division C could invest Tk.40,000 in a new delivery vehicle, which would be depreciated at a rate of
30% per annum on a diminishing balance basis. Annual sales would increase by Tk.64,000, and the
profit margin on sales would be 25% before depreciation. An additional working capital investment of
Tk.10,000 would also be required.
Required:
(a) For 2010, calculate each of the following:
(i) The ROI for each division, and for Navarre Ltd. as a whole, assuming that the extra projects are
not accepted.
(ii) The expected ROI for each of the three extra projects.
(b) Calculate the ROI of each extra project for 2011.
(c) Explain whether each Divisional Manager is likely to accept his or her divisions proposed extra
project and what decision would be in the best interests of the companys shareholders in each case,
insofar as is possible from the information available. (Indicate any reservations which you may have
about the comprehensiveness of the information available).
[Marks: (8+6+6) = 20]
= THE END =
Page 51 of 55

SUBJECT: 403. STRATEGIC MANAGEMENT AND ORGANIZATIONAL BEHAVIOUR
Time: Three hours
Full Marks: 100

Answer any THREE questions from Group A and TWO questions from Group B.

All questions carry equal marks.


GROUP A : STRATEGIC MANAGEMENT (TOTAL MARKS-60)
Q. No. 1.
(a) State the characteristic features of Strategic Management.
(b) Why is to-days Management much concerned with Strategic Management?
(c)
How would you link strategy with ethics?
[Marks: (8+8+4) = 20]
Q. No. 2.
(a) What are the factors that you need to consider for formulating strategies for entering into international markets?
(b) How does international strategy differ from home market strategy?
(c)
Explain the concept of transnational representation.
[Marks: (8+8+4) = 20]
Q. No. 3.
(a) Explain the differences between Mission and Vision of an organization.
(b) We view business as a means to the material and social wellbeing of the investors, employees and the society
at large, leading to accretion of wealth through financial and moral gains as a part of the process of the human
civilization critically evaluate this vision statement set by the premier corporate in Bangladesh namely XYZ
Pharmaceuticals Ltd.
(c)
Suppose you are responsible to develop the mission statement of a newly establish soft drinks company. Which
factors you should consider to develop the mission statement. Prepare the draft of the mission statement.
[Marks: (6+6+8) = 20]
Q. No. 4.
(a) Describe the strategic choices for a firm if it decides to follow differentiated strategy.
(b) Explain the risks of outsourcing and also the ways of managing those risks.
[Marks: (10+10) = 20]
Q. No. 5.
Write short notes of any Four of the following:
(a) Strategic Alliance.
(b) Global Competition.
(c)
Value chain
(d) E-Commerce.
(e) Core Competency.
[Marks: (5x4) = 20]
Page 52 of 55

SUBJECT: 403. STRATEGIC MANAGEMENT AND ORGANIZATIONAL BEHAVIOUR
GROUP B : ORGANIZATIONAL BEHAVIOUR(TOTAL MARKS-40)

Q. No. 6.
(a) What is the need of studying OB?
(b) What factors lead to healthy organizational behavior?
(c)
Why is it significant for a CMA to study OB?
[Marks: (6+8+6) = 20]
Q. No. 7.
(a) What do you understand by group behavior in an organization?
(b) Explain the different steps in the formation of a group.
(c)
How would you ensure an effective group behavior in an organization?
[Marks: (4+8+8) = 20]
Q. No. 8.
(a) What is meant by organizational change?
(b) Explain the different resistances to organizational change.
(c)
As a manager, how would you manage resistances to organizational change?
[Marks: (5+8+7) = 20]
Q. No. 9.
(a) What factors do you think differentiate good decision makers from poor ones? Relate your answer to the sixstep rational model.
(b) Describe organizational factors that might constrain decision makers.
(c)
When do groups make better decisions than individuals? How can a groups demography help you to predict
turnover?
[Marks: (6+6+8) = 20]
=THE END=
Page 53 of 55

SUBJECT: 404. COST AND MANAGEMENT AUDITING.
Time: Three hours



Full Marks: 100
PART A : COST AUDITING (MARKS 50)

Q. No. 1.
(a) Prior to accepting an engagement, an auditor should obtain a primary knowledge of the industry and
of the entity to be audited. Explain.
(b) Cost Auditor is not a technical person to give a detailed description of the process of manufacture(i)
Up to what extent it is true?
(ii) In what fashion you have to describe the process of manufacture in the annexure to the Cost
Audit Report?
[Marks: (5+7) = 12]
Q. No. 2.
(a) What are the factors to be considered at the time of planning of cost audit?
(b) As a Cost Auditor of a large sized manufacturing Company prepare a suitable audit program for audit
of raw materials consumption and control.
(c) Discuss the matters to be reported under the head Auditors Observations and Conclusions Under
Para 19 of the Annexure to the Cost Audit Report Rules.
[Marks: (4+5+5) = 14]
Q. No. 3.
(a) In the context of Bangladesh, what factors should be considered for the development of cost audit
practice in the private sector manufacturing concern? Briefly discuss.
(b) Write short notes on:
(i)
Reasonable assurance;
(ii) Audit evidence.
[Marks: (7+6) = 13]
Q. No. 4.
(a) What are the obstacles in implementing Cost Audit in the private sector of Bangladesh?
(b) As per Companies Act 1994 what are the records to be maintained in respect of
(i)
Production;
(ii) Raw materials;
(iii) Work in progress.
[Marks: {5+(2+2+2)} = 11]
Page 54 of 55

SUBJECT: 404. COST AND MANAGEMENT AUDITING
PART B : MANAGEMENT AUDITING (MARKS 50)

Q. No. 5.
(a) Management audit is a service to management Explain.
(b) You have been appointed as a Management Auditor of a large textile mill. How would you evaluate
the function of manufacturing operations?
[Marks: (4+7) = 11]
Q. No. 6.
(a) What is system audit? Describe its importance in the current business scenario?
(b) Enumerate the various steps involved in conducting systems audit?
(c) List out five measures that may be accepted to prevent and control Management Frauds.
[Marks: (5+5+4) = 14]
Q. No. 7.
(a) Sonali Jute Mills Ltd. is a sick project. You have been appointed as Management Auditor to
investigate the Company. How would you make an in depth study of the factors responsible for its
sickness?
(b) What is green reporting? Describe the components of Environmental Audit Report.
[Marks: (8+5) = 13]
Q. No. 8.
The term corporate governance includes the systems, procedures and structure a company uses to
convey authority, responsibility and accountability among stakeholders. Good corporate governance
balances the interests of, and relationships between, a companys employees, owners and customers to
ensure the long-term sustainability and success of a corporate venture.
(a) Explain what you understand by the terms; authority, responsibility and accountability in the above
statement of corporate governance.
(b) Who are the stakeholders of a listed public limited company in Bangladesh? List them.
(c) Describe how good corporate governance can balance the interest of different stakeholders of a listed
public limited company.
[Marks: (5+2+5) = 12]
=THE END=
Page 55 of 55

ICMA Questions Dec 2012

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

CMA DECEMBER 2012 EXAMINATION

CMA DECEMBER 2012 EXAMINATION

CMA DECEMBER 2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

Time: Three hours

GROUP A: BUSINESS COMMUNICATION

Describe the roles and importance of communication in management.

What are the communication components and how do they interact?

Define Business Report

Discuss the procedures of report writing

Draft a directors report of a public limited company

Do you think electronic device is a must for business communication? Explain

Describe how letter of credit is opened with a bank?

Write a CV with a forwarding letter for the post of Cost Accountant

Central Depository System.

CMA DECEMBER, 2012 EXAMINATION

GROUP B: OFFICE MANAGEMENT

Explain Good Relationship between employer and employee is must.

How would you define Job description?

What are the methods of Job evaluation used in an office? Discuss

Prepare the organogram of a typical commercial bank operating in our country.

What can be the components of the job description of an office manager?

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

Full Marks: 100

PART-A : BUSINESS MATHEMATICS

[Marks: (6+4) = 10]

Solve for x: 22x 3.2x + 2 = 0

[Marks: (5+5) = 10]

where I is the unit matrix of order 3.

CMA DECEMBER 2012 EXAMINATION

Find the area of the region enclosed by y = x and y = -x2 .

Total cost of producing x units is

PART-B : BUSINESS STATISTICS

CMA DECEMBER 2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANT OF BANGLADESH

GROUPA: BUSINESS ECONOMICS

Value in Million BDT

[Marks: (6+7+7) = 20]

CMA DECEMBER 2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

Full Marks: 100

CMA DECEMBER 2012 EXAMINATION

CMA DECEMBER 2012 EXAMINATION

CMA DECEMBER 2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

Full Marks: 100

CMA DECEMBER-2012 EXAMINATION

CMA DECEMBER-2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

Full Marks: 100

PART- A : MANAGEMENT (TOTAL MARKS-50)

* Two marks are reserved for neatness and relevance.

CMA DECEMBER 2012 EXAMINATION

* Two marks are reserved for neatness and relevance.

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

Full Marks: 100

CMA DECEMBER 2012 EXAMINATION

CMA DECEMBER 2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

CMA DECEMBER-2012 EXAMINATION

CMA DECEMBER-2012 EXAMINATION

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH