Beruflich Dokumente
Kultur Dokumente
Q. No. 1.
As on December 31, 2001 the end of annual accounting period, the trial balance of the ledger of
Mahmud Store are as follows:
MAHMUD STORE
TRIAL BALANCE
DECEMBER 31, 2001
Sl. No.
Name of Accounting
Debit Tk.
Credit Tk.
1
Cash
90,000
2
Accounts Receivable
166,000
3
Merchandise inventory
300,000
4
Purchase
3,310,000
5
Prepaid Insurance
38,000
6
Store Equipment
800,000
7
Accumulated D/P Store Equipment
170,000
8
Accounts Payable
190,000
9
Mahmud Capital
900,000
10
Mahmud drawings
220,000
11
Sales
4,830,000
12
Sales Return & allowances
150,000
13
Sales Discount
72,000
14
Purchase Return & allowances
100,000
15
Purchase Discount
64,000
16
Freight in
122,000
17
Freight out
75,000
18
Advertising expenses
155,000
19
Rent expenses
200,000
20
Salaries expenses
395,000
21
General expenses
165,000
22
Vat current account
4,000
Total
6,258,000
6,258,000
Additional information:
(a)
Merchandise inventory on hand at December 31, 2001 is Tk. 395,000.
(b)
Merchandise in transit at December 31, 2001 costing Tk. 5,000, which was shipped by a supplier
under the terms F.O.B Shipping point and recorded as purchase but not included in ending
Merchandise inventory.
(c)
Insurance expired during the period is Tk. 20,000.
(d)
Salaries accrued but not paid Tk. 10,000.
(e)
Depreciation expenses are changed during the period was Tk. 80,000.
(f)
General expenses include Tk. 15,000 for utilities, which is to be treated as selling expenses.
Required:
(i)
Multiple Income Statement.
(ii)
Owners Equity Statement.
(iii)
Balance Sheet.
[Marks : (10+3+7) = 20]
Q. No. 2.
(a)
(b)
(g)
The receipt column of the cash book has been overcast by Tk.1,000.
Cheques outstanding to Tk.3,760 entered in the cash book as paid into the bank have not been
cleared.
Cheques issued amounting to Tk.5,230 have not been presented.
Discount allowed Tk.110 has been included through mistake in the cheque entered in the bank
column of the cash book.
A trade credit note Tk.290, was received in June, 2006, but not recorded in the books.
A cheque for Tk.100, originally issued in 2005 was replaced when out of date and entered again
in the cash book. It was still outstanding (and not out of date) on June 30, 2006. Both the cheques
were included in the total of unpresented cheques Tk.5,230.
The bank has charged the No-2 account with a cheque for Tk.2,000 in error. This should have
been charged to No.-1 account.
Requirements:
(i)
(ii)
Prepare a bank reconciliation statement to show the bank balance as per No.-1 account.
[Marks: (5+15) = 20]
Q. No. 4.
Three hours
Full Marks:100
Answer any THREE questions from each part, where Q. No. 4 and 8 are compulsory.
Answer must be brief, relevant, neat and clean.
Use a fresh sheet for answering each question.
All questions must be answered in English.
Three hours
Full Marks:100
Q. No. 1.
(a)
In a survey of 400 students in a school, 100 were listed as smokers and 150 were chewers of gum;
75 were listed as both smokers and gum-chewers. Find out how many students were neither
smokers nor gum-chewers.
(b)
If the roots of the quadratic equation ax2 + bx + c = 0 are in the ratio m : n, prove that (m+n)2ac =
b2mn.
[Marks: (5+5) = 10]
Q. No. 2.
(a)
If A = {1, 4}, B= {4, 5}, C= {5, 7}, verify that A (BC) = (AB) (AC)
(b)
Q. No. 3.
(a)
Solve the following system of the two linear equations and express it by a graph.
2x + y 11 = 0
3x + 5y 27 = 0
(b)
In how many months it will take at 10% compounded quarterly of a year for Tk. 5,000 to grow to
Tk. 20,000.
[Marks: (5 + 5) = 10]
Q. No. 4.
(a)
If the equations x2 + px + q = 0 and x2 + qx + p = 0 have a common root, show that their other
roots are the roots of the equation x2 + x + pq = 0.
(b)
How many different words each consisting of 3 consonants and 2 vowels, can be formed out of
12 consonants and 5 vowels, the letters of the words being all different?
[Marks: (5 + 5) = 10]
Q. No. 5.
(a)
Find the equation of the straight line passing through the intersection of the lines 4x 3y 1 = 0,
2x 5y + 3 = 0 and parallel to the line 4x + 5y = 6.
(b)
log 3 81 = 2 and
if x2+y2 = 6xy.
[Marks: (5 + 5) = 10]
(b)
4 2 3
0 10 9
2 2 1
Q. No. 7.
(a)
dy
dx
dy
dx
.
[Marks: (5 + 5) = 10]
(b)
You are given the following data pertaining to kilowatt hours of electricity consumed by 100
persons in Dhaka city:
Consumption (kwh)
No. of users
Calculate:
0 - 10
6
(ii)
10 20
25
20 30
36
Standard deviation
30 40
20
40 50
13
Q. No. 2.
(a)
The storekeeper of the Dhaka Industries Limited has studied his record and notices that for the
past 310 working days in the year, the demand for his product (Malai) has varied as follows:
Demand (units)
5000
6000
7000
8000
9000
10000
Number of days
20
60
80
120
20
10
What is the expected demand for his product?
(b)
A company learned that inventory shortage were associated with a loss of goodwill with a
probability 0.10. The company also knew that a loss of goodwill from all causes occurred with a
probability of 0.15. What is the probability of an inventory shortage, given a loss of goodwill?
[Marks: (6+4) = 10]
Q. No. 3.
(a)
What is statistical average? What are the desirable properties for an average to possess?
(b)
Incomes of employees in an industrial concern are given below. The total income of the 10
employees in the class over Tk. 2,500 is Tk. 30,000. Compute the mean income. Every employee
belonging to the top 25% of the earners is required to pay 5% of his income to workers relief fund.
Estimate the contribution to this fund.
Income
Below 500
500 1000
1000 - 1500
Frequency
90
150
100
Income
1500 -2000
2000 2500
2500 and over
Frequency
80
70
10
[Marks : (4+6) = 10]
(b)
Two house wives, Rozi and Lozi, asked to express their preference for different kinds of detergents,
gave the following replies:
Detergent
A
B
C
D
E
F
G
H
I
J
Rozi
4
2
1
3
7
8
6
5
9
10
Lozi
4
1
2
3
8
7
5
6
9
10
What is business fore-casting? What are the assumptions on which business fore-casting are
made?
(b)
Calculate the trend values by the method of least squares from the following data given below
and estimate the sales for the year 2008.
Year
Sales Tk. million
2000
12
2001
18
2002
20
2003
2004
23
27
[Marks : (4+6) = 10]
Q. No. 6.
(a)
(b)
A purchasing agent obtained samples of electric lamps from two samples. He had the samples
tested in his own Laboratory for length of life, with the following results:
Length of Life in hours
Sample from
Co. A
10
16
26
8
700 900
900 1100
1100 1300
1300 1500
Co. B
3
42
12
3
(b)
(c)
Answer FIVE questions taking at least TWO from each Group A and B.
Show Computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.
GROUP A : BUSINESS ECONOMICS
Q. No. 1.
(a)
(b)
(c)
Mr. Sulaiman, a CMA professional, left his job of Tk. 50,000.00 per month and started a consultancy
business under the name Sulaiman Cost and Management Consultancy Limited with a capital of Tk.
5,00,000.00 and a bank loan of Tk. 3,00,000.00, interest rate being 14% p.a. He earned Tk. 15,00,000.00
during the year 2008-2009. He used a room of his fathers business for which he need not spend any
rent, which could be rented out @ Tk. 8,000.00 per month. During the year, material cost and service
charges were Tk. 80,000.00 and salaries of employees were Tk. 90,000.00. Depreciation of Equipment is
estimated at Tk. 6,000.00. Calculate accounting profit and economic profit of Sulaiman Cost and
Management Consultancy Limited for the year 2008 2009.
State the law of demand. What are the circumstances when demand falls even if price remains
unchanged?
(b)
What is the impact of recent global financial crisis on the exports of Bangladesh?
(c)
Tell whether product X and Y are complementary or Substitute goods if
i) increase of price of X leads to increase of price Y
ii) increase of price of X leads to decrease of price Y
iii) increase of price of X does not bring any change in the price of Y
(d)
Define price elasticity, income elasticity and cross elasticity.
[Marks : (6+5+3+6) = 20]
Q. No. 3.
(a)
(b)
(c)
Q. No. 4.
(a)
(b)
(c)
Distinguish between
i.
Fixed cost and Variable cost, and
ii.
Internal economies and External Economies of firms
State the law of diminishing return and indicate exceptions to this law.
Calculate average cost, marginal cost, marginal revenue, average revenue and profit from the
following information
Units of Output
1
2
3
4
5
6
7
8
(d)
Total Cost
(Tk.)
300
350
400
450
550
610
670
750
Variable Cost
(Tk.)
200
250
300
350
450
510
570
650
Fixed Cost
(Tk.)
100
100
100
100
100
100
100
100
Total Revenue
(Tk.)
150
250
400
500
600
650
700
760
Identify the Break Even Output Level, Shut down Output Level and Profit maximizing output
level from c as above.
[Marks : (4+5+5+6) = 20]
7
Distinguish between:
i)
GDP and National Income; and
ii)
National Income at market price and National Income at factor cost.
Calculate GDP and National Income of Bangladesh during 2008-2009 from the following
information
Dollars in Crores
Gross Private Investment
2500
500
3500
Depreciation Charges
150
Exports
Imports
1650
1850
150
50
120
150
[Marks : (8+12) = 20]
Q. No. 7.
(a)
(b)
(c)
Q. No. 8.
(a)
(b)
(c)
What is FDI ?
Critically evaluate the risks of FDI ?
Why do you think FDI is not coming to Bangladesh ?
[Marks : (3+9+8) = 20]
=THE END=
Three hours
Full Marks:100
Q. No. 1.
(a)
In the context of revised IAS 1, state the method classifying current assets and current liabilities.
(b)
STAR Company Private Ltd. registered under Company Act1994, submits the following trial
balance as of 31 December 2008.
Accounts Title
Cash
Investment in Land
Customer Receivable
Inventory
Prepaid Expenses
Land
Plant & Machineries
Other Assets (non current)
Sales on Accounts
Contractor Payable
Accrued Wages
Unearned Revenue
Debentures
Other Liabilities
Common Stock
Retained Earnings
Cash Sales
Interest Revenue
Gain on Condemnation of Land by Govt.
Cost of Goods Sold
Commercial and General Overhead
Loss from tidal bore charge
Financial Expenses
Income Tax
Operating Loss on discontinued business
Dividends
Sales Allowances
Total
Dr. (Tk)
1,20,000
1,70,000
3,02,000
56,000
54,000
2,60,000
11,67,000
15,63,000
Cr. (Tk)
10,50,000
2,40,000
2,20,000
33,000
12,00,000
3,36,000
2,90,000
11,08,000
19,00,000
23,000
2,00,000
15,65,000
6,40,000
1,50,000
70,000
2,73,000
60,000
1,00,000
50,000
66,00,000
66,00,000
Additional Information:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
Inventory includes spoiled & not salable goods worth Tk. 6,000.
Commercial and General Overhead incorrectly includes Tk. 15,000 for office furniture purchases
(other assets). The purchases were made on December30.
The prepaid expenses were paid on September 1 and relate to a 3 years insurance policy that
went into effect on September1.
The unearned revenue relates to rental of an unused portion of the corporate offices Tk. 33,000
received on April1 and represents payment in advance for one years rental.
Plant & Machineries includes Tk. 10,000 for equipment repairs that were erroneously recorded as
machineries purchases. The repair made on December30.
Other assets include Tk. 80,000 for miscellaneous office supplies which were purchased on mid
October. At the end of the year count reveals that only Tk. 6,500 of office supplies remains.
It has been decided that un-collectible account expenses will be Tk. 2,000 for which provision
was not made earlier. The account of M/s Khan & Co. will be written off for this purpose.
3,53,300
To be determined
50,000
25,000
1,99,875
To be determined
50,000
Mower Company pays for all operating expenses with cash and purchases all inventory on
credit. During 2008, cash totaling of Tk.4,71,000 was paid on accounts payable. Operating
expenses for 2008 totaled Tk. 2,00,000. All sales are cash sales. The inventory was restocked by
purchasing 1,500 units per month and valued by using periodic FIFO. The unit cost of inventory
was 32.60 during January2008 and increased Tk. 0.10 per month during the year. All sales are
made for Tk. 50 per unit. The ending inventory for 2007 was valued at Tk. 32.50 per unit.
Required:
(i)
(ii)
(iii)
(iv)
(v)
Q. No. 3.
(a)
(b)
The Star Mining Company paid Tk. 29,00,000 in 2001 for property with a supply of natural resource
estimated at 20,00,000 tons. The estimated cost of restoring the land for use after the resources
are exhausted is Tk. 3,25,000. After the land is restored it will have an estimated value of Tk.
2.25,000. Development costs such as drilling and road construction were Tk. 8,00,000. Building,
such as bunk houses and messhall were constructed on the site for Tk. 2,00,000. The useful lives of
the buildings are expected to terminate upon exhaustion of the natural resources. Operations
were not begun until January 01, 2002. In 2002, resources removed totaled 6,00,000 tons. During
2003, an additional discovery was made indicating that available resources subsequent to 2003
will total 18,75,000 tons. Because of a strike, only 4,00,000 tons of resources were removed during
2003.
Required: Compute the depletion and also the depreciation charge for 2001, 2002 & 2003.
(c)
On July 02, 2002 Simanto Delivery Company traded with a dealer an old delivery taxi cab for a
newer taxi model. Data related to the old taxi and new taxi follow:
Amount in Tk.
Old Taxi:
Original Cost
Accumulated Depreciation as of July 02, 2002
Average published retail value
New Taxi:
Listed Price
Cash Price without trade-in
Cash paid with trade-in
2,00,000
1,50,000
42,000
2,50,000
2,25,000
1,95,000
Instruction: Give the journal entry on Simantos books to record the purchase of the new Taxi.
10
[Marks: (6 + 8 + 6) = 20]
11
October 31,2008
(Amount in Taka)
2,26,000
1,48,000
2,91,000
2,500
10,000
90,000
1,95,000
2,15,000
8,500
5,000
5,39,000
2,87,000
35,000
1,000
20,53,000
Credits
November 1,2007
(Amount in Taka)
50,000
1,00,000
3,00,000
2,000
40,000
80,000
1,95,000
90,000
9,000
10,000
------------------8,76,000
October 31,2008
(Amount in Taka)
8,000
26,250
39,750
55,000
70,000
18,000
35,000
1,000
40,000
2,50,000
3,00,000
90,000
94,000
1,16,000
8,98,000
12,000
20,53,000
Increase(Decrease)
(Amount in Taka)
1,76,000
48,000
(9,000)
500
(30,000)
10,000
--1,25,000
(500)
(5,000)
539,000
287,000
35,000
1,000
11,77,000
November 1,2007
(Amount in Taka)
5,000
22,500
27,500
60,000
20,000
15,000
10,000
9,000
60,000
2,50,000
2,00,000
80,000
1,12,000
5,000
----------8,76,000
Increase(Decrease)
(Amount in Taka)
3,000
3,750
12,250
(5000)
50,000
3,000
25,000
(8000)
(20000)
-----1,00,000
10,000
(18000)
1,11,000
898,000
12,000
11,77,000
12
(ii)
Check issued by Ludmia Corporation for Tk.630 was charged to Meghan Company in error.
(iii)
(iv)
Deposit of Tk.1,400 was erroneously credited to Meghan Company account by the bank.
(v)
Outstanding cheque at December 31, 2008, were Tk.10,560. They included a Tk.600
cheque outstanding for 8 month to Amco products which was cancelled in December
and a new cheque issued. No entry was made for the cancellation.
(vi)
(vii)
An error in addition was made on the December 23 deposit slip. This slip showed a total of
Tk.2,220. The correct balance as credited to the account by the bank was Tk.2,020. A
count of cash on hand showed an overage of Tk.200 as of December 31.
(viii)
The cash in Bank balance in the general ledger as of December 31, 2008 was Tk.31,280.
Required:
1.
Prepare a bank reconciliation statement which reconciles the bank balance with the balance
per books.
2.
= THE END =
13
Three hours
Full Marks:100
Q. No. 1.
Consider the information below for the year ended December 31, 2008 and complete the cost of
goods manufactured statement in good form:
Taka
Finished goods, December 31, 2008
Supplies, January 1, 2008
Property Tax
Income Tax
Raw Material, December 31, 2008
Payroll
Purchase Discount
Work-in-Process, January 1, 2008
Material Purchase
Work-in-Process, December 31, 2008
Finished Goods, January 1, 2008
Freight in
Supplies used
Freight out
Supplies, December 31, 2008
Raw Material, January 1, 2008
Purchase Returns and Allowances
Rent
Depreciation:
Factory Building
Factory Plant
Office Building
Office Furniture
Interest on Borrowings
Insurance
Utility
Taka
50,000
3,000
15,000
17,000
25,000
98,000
4,000
60,000
90,000
39,000
70,000
10,000
12,000
15,000
2,000
15,000
10,000
20,000
8,000
9,000
7,000
6,000
30,000
23,000
11,000
10,000
(1)
Payroll account includes payment made to both direct and indirect labor. As a policy,
payment for direct labor is 80% higher than indirect labor.
(2)
(3)
(4)
For both direct and indirect material, the company uses a single account. Records show
that direct material is 8 times higher than indirect material.
[Marks: 20]
14
Order ref.
071
075
132
185
205
Unit
Gram
Kg.
Kg.
Ibs
Ibs.
Unit price
Tk.25
Tk.160
Tk.212
Tk.25
Tk.32
Qty.
1,000
200
175
1,100
550
Fright
C&F
Other relevant data were as follows:
Import duty 10%, insurance 4%, clearing charges 5%, supplementary duty 2.5%, ordering cost Tk.500 per
order and receiving cost estimated to be Taka 10 per kg. It is the company policy to apportion fright on
the basis of weight.
Required: Calculate unit cost for each material that will be entered on the ledger card.
[Marks: 20]
Q. No. 3.
The Best Supply Company has been experiencing stock outs on one of it important materials, even
though deliveries are dependable within one month from the date of an order. Management asks that
a safety stock for this item be established and provides the following records of actual and forecast
usages during the past 9 (nine) months:
Month
January
February
March
April
May
June
July
August
September
Usage
475
480
490
500
510
520
500
490
485
Forecast
490
490
475
485
500
510
510
510
500
It is believed that 90 to 95 percent protection against a stock out is adequate. This protection
can be achieved by doubling the deviation found.
Requirement:
(a)
(b)
Q. No. 4.
3M operates 5 days a week and 8 hours a day. Ajax Rosario, a semi-killed worker, works at a
guaranteed rate of Tk. 6 per hour. Standard production for Ajax is 192 units per day. Factory overhead
per labor hour is Tk.3. Production for the first week of June was 180, 200, 220, 224, 192 units for Monday
through Friday respectively.
15
Required:
(a) Compute conversion cost per unit under straight piecework plan.
(b) Compute conversion cost per unit under 100% bonus plan.
[Marks: (8+7) = 15]
Q. No. 5.
Six Sigma is a sheet metal fabricator. Its total factory overhead costs are a linear function of machine
usage. Different capacity level (annual) of Six Sigma is given as:
Theoretical Capacity
Practical Capacity
Normal Capacity
Six Sigma computes predetermined overhead rate by dividing expected actual costs by expected
actual capacity at the beginning of each year. During 2009, it actually works for 9,500 machine hours
(MH) with actual overheads amounting to Tk.33,85,000. But the budgeted amount of factory overhead
was Tk.35,00,000 which would be Tk.30,00,000 at normal capacity.
Required:
(a)
Calculate the amount of over or under applied factory overhead for the year.
(b)
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?
(c)
Without influencing your answer to requirement (a) 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.
(d)
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.2,00,000, Tk.4,00,000 and Tk.74,00,000
respectively. Give the end-of-period entry to close factory overhead control.
[Marks: (4x5) = 20]
Q. No. 6.
(a)
What do you mean by service reciprocity? Do you believe that step down method of service
cost allocation doesnt consider service reciprocity at all? How?
(b)
High degree of labor turnover produces a weaker form of learning curve how do you
evaluate the statement?
[Marks: (5+5) = 10]
= THE END =
16
What is management?
(b)
(c)
Q. No. 2.
(a)
(b)
What are the responsibilities of a manager with regard to environment and culture of an
organization?
(c)
Q. No. 3.
(a)
(b)
(c)
Q. No. 4.
(a)
(b)
(c)
Explain the various leading theories of motivation and their strengths & weaknesses.
Marks : (5+6+5) = 16
Q. No. 5.
(a)
(b)
What is the system approach to selection of managers? How does it differ from other
approaches?
(c)
17
(b)
(c)
Q. No. 7.
(a)
(b)
(c)
Q. No. 8.
(a)
Do you think that market segments and market sectors are alike? Explain.
(b)
(c)
Q. No. 9.
(a)
(b)
(c)
Identify and define the steps of the business buying process and list out the characteristics of
business buying process.
Marks : (5+6+5) = 16
Q. No. 10.
(a)
(b)
How would you assess the potential foreign market if you are interested to get access of it?
(c)
18
These questions carry 80 marks (Part A) and balance 20 marks (Part B) is for practical test
(to be taken later on).
Q. No. 1.
(a)
What is the difference between computer based information system and manual information
system?
(b)
What is Barcode reader? What are the applications of Barcode reader in business? Mention
what factors we should consider for buying a monitor and a printer?
Marks : (10+10) = 20
Q. No. 2.
(a)
What factors do you take into consideration while adopting an information system in an
Organization? Explain at least four of them.
(b)
Describe the three principal data base models and their advantage.
Marks : (10+10) = 20
Q. No. 3.
(a)
What do you mean by Enterprise Resource Planning (ERP) Software? How does if differ from the
integrated Accounting Package Software?
(b)
What do you understand by electronic commerce? Explain the foundations of electronic
commerce.
Marks : (10+10) = 20
Q. No. 4.
(a)
(b)
(c)
19
Q. No. 1.
Mr. Kamal Keeps his books on single entry system. His balance sheet on 31.12.2007 is as follows:
Tk.
Tk.
Kamals capital
31,500 Premises
15,600
Creditors
7,210 Plant and Machinery
4,200
Stock
8,760
Debtors
9,820
_______ Cash
330
38,710
38,710
The following is a summary of his receipts and payments for the year ended on 31.12.2008:
Receipts
Cash on account of credit sales
Cash sales
Tk.
42,760
18,630
Payment
Creditors
Wages
General Expenses
Machinery (1-7-08)
Drawings
Tk.
39,540
7,430
6,270
Capital
2,000
1,600
_______
5,360
63,390
60,200
On 31.12.2008, the amount due to creditors was Tk.8,170 and the debtors and stock amounted to
Tk.9,200 and Tk.8,540 respectively. You are required to prepare Trading and profit and loss account for
the year ended on 31.12.2008 and Balance Sheet as on that date, after making adjustments in respect
of the followings:
(i)
(ii)
(iii)
(iv)
(v)
20
6,000
Loading charges
1,000
Lorry hire
12,000
Railway freight
21,000
The cases are received by Mr. Rahim on 15.01.08. The account sales received from Mr. Rahim on
30.06.08 revealed the following:
40 cases sold on 21.03.08 @ Tk.1,500 per case, 30 cases sold on 24.05.08 @ Tk.1,200 per case and 10
cases sold on 15.06.08 @ Tk.1,300 per case. 5 cases of medicine was stolen by a dishonest employee. A
compensation Tk.2,000 was realized form him. Mr. Rahim incurred unloading charges of Tk.2,000 and
warehouse rent Tk.3,000.
Required:
Prepare a consignment Account.
[Marks: 20]
Q. No. 4.
Sony Co. Ltd., Japan established its branch Sony-BD in Bangladesh. Sony-BD maintains separate set of
books. Following are the transactions of Sony-BD:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
Tk.2,000
Tk.2,000
Tk.2,000
Tk.1,500
Tk.350
Tk.500
Tk.250
Advertising
Tk.3,000
Tk.1,000
Tk.85,000
Required:
(a)
(b)
Give adjusting and closing entries both in branch and home office books.
[Marks: (12+8) = 20]
21
Tk.1,30,000
21,500
Total assets
Accounts payable
Bonds payable
Premium on bonds payable
Preferred stock, Tk.100 par
Common stock, Tk. 10 par
Premium on common stock
Retained earnings
Total liabilities and stock holders equity
Balance Sheet
December 31
2008
2007
Tk.38,625
(Tk.5,625)
82,000
95,500
73,250
50,000
12,000
27,000
Tk.95,000
1,08,500
20,000
75,000
--35,000
Tk.3,14,375
55,875
50,000
2,375
--1,60,000
24,000
22,125
Tk.3,14,375
Tk.2,76,875
49,375
20,000
--50,000
1,00,000
--57,500
Tk.2,76,875
Item
Debit
Credit
--Tk.25,000
-----
-----
57,500
32,500
2008:
Balance
Debit (Tk.)
Credit (Tk.)
Jan-1
Oct-15
Balance
Cash dividends
Dec-12
5,000
---
---
27,500
Dec-31
Net loss
5,375
---
---
22,125
Income statement data for the year ended December 31, 2008, summarized operations as follows:
Loss before extraordinary items
Extraordinary loss on retirement of bonds
Net loss
Tk.4,375
1,000
Tk.5,375
Equipment, cost Tk.15,000, book value Tk.3,000, was scrapped, salvage of Tk.900 being recovered on
the disposal. Additional equipment, cost Tk.50,000, was acquired during the year. Long-term
investments, cost Tk.15,000, were sold for Tk.18,250; 7% bonds, face value Tk.20,000, were called in at
105, and new 10-year, 5% bonds of Tk.50,000 were issued at 105 on July 1. Preferred stock was retired at
a cost of Tk.110 while 6,000 shares of common stock were issued at Tk.14. Depreciation on building and
equipment for the year was Tk.13,500. Patents, costing Tk.35,000, were written off.
Required: A cash flow statement.
[Marks: 20]
THE END
********
22
Three hours
Full Marks:100
Q. No. 1.
(a)
(b)
(c)
(d)
In a just-in-time (JIT) system, what is meant by the pull approach to the flow of goods, as
compared to the push approach used in conventional systems?
What is the role of Cost Management with respect to the objective of continuous improvement?
Where does the theory of constraints recommend that improvement efforts be focused?
Samir companys projection for the coming year is as follows:
Total (Tk.)
Sales
Less Variable expenses
Contribution margin
Less Fixed expenses
Operating income
200,000
120,000
80,000
64,000
16,000
20
12
8
Required:
(i)
(ii)
(iii)
Period-1
30,000
30,000
25,000
Tk.15.00
Tk.1.50
2.50
2.00
Tk.6.00
Tk.120,000.00
Tk.50,000.00
Period-2
30,000
25,000
25,000
Tk.15.00
Tk.1.50
2.50
2.00
Tk.6.00
Tk.120,000.00
Tk.60,000.00
Required:
(a)
(b)
(c)
(d)
Prepare a statement of earnings for both periods under the: (1) Absorption costing method, (2)
Direct costing method.
Account for the difference in net earnings between the two methods.
Explain why net earnings under the two methods for the two periods are equal combindly.
If the firm used direct costing in its formal accounting records, what adjustments are necessary
for external reporting?
[Marks: (14+2+2+2) = 20]
23
(b)
Dancy-clean Corporation produces a variety of cleaning compounds and solutions for both
industrial and house hold use. While most of its products are processed independently, a few are
related, such as the companys Grit 337 and its sparkle silver polish. Grit 337 is a coarse cleaning
powder with many industrial uses. It costs Tk.1.60 a pound to make, and it has a selling price of
Tk.2.00 a pound. A small portion of the annual production of Grit 337 is retained in the factory for
further processing. It is combined with several other ingredients to form a paste that is marketed
as sparkle silver polish. The polish sells for Tk.4.00 per jar.
This further processing requires one-fourth pound of Grit 337 per jar of silver polish. The additional
direct costs involved in the processing of a jar of silver polish are:
Other ingredients
Tk.0.65
Direct labor
1.48
Tk.2.13
Overhead costs associates with the processing of the silver polish are:
Variable manufacturing overhead cost 25% of direct labor.
Fixed manufacturing overhead cost (per month):
Production (overhead) supervisor
Tk.1,600.00
Tk.1,400.00
The production supervisor has no duties other than to oversee production of the silver polish. The
mixing equipment is a special purpose equipment acquired specifically to produce the silver
polish. It has only negligible resale value.
Direct labor is a variable cost at Dancy-clean corporation.
Advertising costs for the silver polish total Tk.4,000.00 per month. Variable selling costs associated
with the silver polish are 7.5% of sales.
Due to a recent decline in the demand of silver polish, the company is wondering whether its
continued production is advisable. The sales manager feels that it would be more profitable to
just sell all of the Grit 337 as a cleaning powder.
Required:
(i)
What is the incremental contribution margin per jar from further processing of Grit 337 into
silver polish?
(ii)
What is the minimum number of jars of silver polish that must be sold each month to justify
the continued processing of Grit 337 into silver polish? Show all computation in good form.
[Marks: (4+9+7) = 20]
Q. No. 4.
(a)
(b)
The management of the Gulshan Company wants to prepare budgets for one of its products,
Dura flex for July 2010. The firm sells the product for Tk. 40.00 per unit and has the following
expected sales units for these months in 2010.
April
May
June
July
August
September
5,000
5,400
5,500
6,000
7,000
8,000
The production process required 4 pounds of Dura-1000 and 2 pounds of flex-plus. The firms
policy is to maintain a minimum of 100 units of Dura flex on hand at all time. The units on hand at
the end of a period, however, should not fall below 10 percent of the expected sales for the
following month. All materials inventories are to be maintained at 5 percent of the production
needs for the next month, but not to exceed 1,000 pounds. The firm expects all inventories at the
end of June to be within the guide lines. The purchased department expects the materials to
cost Tk. 1.25 per pound and Tk. 5.00 per pound of Dura 1,000 and flex-plus respectively.
24
(b)
According to the economists approach to setting prices, the profit maximizing price should
depend on what two factors?
(c)
Iqbal manufactures custom made pleasure boats ranging in price from Tk. 10,000 to Tk. 250,000.
For the past thirty years, Iqbal has determined each boats sales price by estimating the costs of
materials, labor and a prorated portion of overhead and by adding 20% to those estimated
costs. For example, a recent price quotation was determined as follows:
Direct materials
Direct labor
Overhead
Tk. 5,000
8,000
2,000
Tk. 15,000
3,000
Tk. 18,000
Plus 20%
Sales price
The overhead figure was determined by estimating the total overhead cost for the year and
allocating it at 25% of direct labor.
If a customer rejects the price and business is slack, Iqbal is often willing to reduce the mark up to
as little as 5% over estimated costs. Thus average markup for the year is estimated at 15%.
Iqbal has just completed a pricing course and believes that the company could use some of the
modern techniques taught in the course. The course emphasized the contribution margin
approach to pricing, and Iqbal feels that such an approach would be helpful in determining the
sales prices of custom-made pleasure boats.
Total overhead (including marketing and administrative expenses for the year) has been
estimated at Tk. 150,000 of which Tk. 90,000 is fixed and the remainder is variable in direct
proportion to direct labor.
Required:
(i) (a)
Compute the difference in profit for the year if a customers offer of Tk. 15,000 instead
of Tk. 18,000 price quotation shown above is accepted.
(b)
Determine the minimum sales price Iqbal could have quoted without reducing or
increasing profit.
(ii) State the advantages of the contribution margin approach to pricing used by Iqbal.
(iii) Identify the pitfalls, if any to contribution margin pricing.
Marks : (4+4+6+3+3) = 20
= THE END =
25
Answer FIVE questions taking at least TWO from each group A and B.
Full Marks :
What is meant by discharge of a contract? What are the modes of discharge of contract?
All contracts are agreements but all agreements are not contracts Discuss.
Who are competent to enter into a contract? Discuss the contractual liability of a minor with
reference to a leading case.
[Marks : (7+6+7) = 20]
Q. No. 2.
(a)
(b)
(c)
Describe the rules regarding the presentation of a Bill of Exchange with exception.
Discuss the features of negotiable instruments.
Difference between Holder and Holder in Due-Course.
[Marks : (8+6+6) = 20]
Q. No. 3.
Define and distinguish between an Agent and the Principal. Under what circumstances an
agency may be terminated.
[Marks =
20]
Q. No. 5.
(a)
(b)
Q. No. 6.
State the procedures for settlement of an industrial dispute.
[Marks =
==THE END==
26
20]
Three hours
Full Marks:100
Q. No. 1.
(a) Write short notes in relation to Income Tax Ordinance, 1984
(i)
Speculative Business
(ii)
Permanent Establishment (PE)
(iii)
Profits in lieu of salary
(iv)
National Board of Revenue (NBR)
(b)
Q. No. 2.
M/S John Morris Inc. is a multinational company doing business in Bangladesh Branch. The company
filed return of income for the assessment year 2009-2010 showing income at Tk. 30,00,000. Examination
of the audited statement of accounts filed with the return of income revealed the following:(a)
Salary includes Tk.3,30,000 paid to a Director working at the head office at California. He has
never visited Bangladesh and no tax, as such, has been deducted at the time of making the
payment.
(b)
Head office expenses charged Tk.11,00,000. No evidence could be produced for this other than
HO auditors certificate.
(c)
Fine Tk. 11,000 paid for violation of customs law charged to P& L Account.
(d)
Two Nissan Petrol Jeeps purchased for Tk. 45,00,000 during the year. Depreciation @20% charged
on the full cost of the vehicles.
(e)
To procure business Tk. 10,00,000 has been paid as commission to a local agent. In making the
payment, the provision of section 53E of. I.T. Ordinance, 1984 has not been complied with.
(f)
The company sold a motor vehicle for Tk. 4,65,000. Original cost of the vehicle was Tk. 5,25,000
and the written down value was Tk,. 3,25,000. This has not been reflected in the accounts.
(g)
(h)
Miscellaneous expenses include Tk. 72,000 paid as salaries to three servants who are working at
the residence of the Managing Director.
(i)
Conveyance expenses include Tk, 2,20,000 paid for the plane fare of the wife and son of the
Managing Director for the visit of the neighboring countries.
(j)
Interest expense claimed at Tk. 33,50,000. The company has outstanding bank loan of Tk. 2.10
crores. The company advanced Tk. 75,00,000 interest-free loan to a sister concern in Bangladesh.
From the above information compute the total income and tax liability of the company for tax
purpose.
[Marks: 20]
27
(ii)
Contract business;
(iii)
(iv)
What consequences an importer shall face if he fails to submit mandatory PSI certificate?
(b)
(c)
Gift tax revenue is dwindling day by day. Do you agree with the statement? If not show the
reasons.
(d)
Is there any inner bondage/link among Customs, VAT & Income Tax Policy?
(e)
Q. No. 5.
(a)
What is foreign Travel Tax? Discuss the mode of levy on travel by Air and travel by land and sea.
Who is responsible to collect tax on travel by Air? Is there any scope to exempt or reduce such
tax? What is the procedure to get refund to foreign Travel Tax?
(b)
How the values of goods and services are determined for imposition of VAT?
(c)
What are the services brought under VAT coverage though Finance Act, 2009?
[Marks: (10+5+5) = 20]
= THE END =
28
Q. No. 1.
(a)
Why are Segment Disclosures needed in the Financial Statements?
(b)
Hitech Corporation has its Home Office in Dhaka and a Branch in Chittagong. The following
information were available from the books of Home Office and the Branch as on 31 December
2008:
Home Office (Tk.)
100,000
1150,000
2050,000
152,000
52,000
Branch (Tk.)
45,000
-1550,000
62,000
31,000
The Branch books show the Home Office account at Tk. 90,000 (Cr.) and the Home Office books
show the Branch account at Tk. 300,000 (Dr.)
The Branch receives all its supplies from the Home Office, which are invoiced at 25 percent over
cost. During the year, the Home Office sent invoices to the Branch to the tune of Tk. 1045,000. The
Home Office credits its Sales Account with the invoice price of the goods sent to the Branch.
The Home Office billed the Branch for Tk. 120,000 on 31 December 2008 representing the Branchs
share of expenses incurred by the Home Office. The said expenses had not been recorded in the
books of the Branch.
All cash collections made by the Branch are deposited in a local bank in the account of the
Home Office. Deposits of this nature included the following:
Amount
50,000
20,000
40,000
The expenses of the Branch are net by the Home Office from time to time for which amounts
are sent in advance to the Branch. A sum of Tk. 30,000 sent to the Branch by the Home Office
on 29 December 2008, in this connection, was received by the Branch on 3 January 2009.
Required:
Prepare the Income Statement in columnar form after showing the reconciliation
of Branch account and Home Office account balances.
[Marks: (5+20) = 25]
Q. No. 2.
(a)
What is functional currency? What factors are used to determine a reporting entitys functional
currency?
(b)
Greener Inc. is a small company based in Australia, which has a subsidiary Greener BD Private
Ltd. in Bangladesh. At the end of the financial year the following balances appeared in the
books of Greener BD Private Ltd.:
Trial Balances as at 31 December 2008
Amount in Taka
Debit
Plant and Equipment
Credit
1000,000
Accumulated Depreciation
140,000
200,000
Accounts Receivable
100,000
90,000
120,000
29
360,000
30
350,000
250,000
180,000
500,000
2000,000
1200,000
100,000
140,000
100,000
110,000
30,000
50,000
100,000
3560,000
3560,000
1.
2.
Q. No. 3.
The following particulars are stated in the Balance Sheet of M/s. Saiham Limited as on 30th June, 2003:
Taka in lacs
Deferred tax liability (Cr.)
Deferred tax assets (Dr.)
20.00
10.00
Tax rate
Depreciation as per Book
Depreciation for tax purpose
There were no additions to fixed assets during the year.
31
40%
50.00
30.00
(iii)
Items disallowed in 2002 2003 and allowed for tax purposes in 2003 2004
32
10.00
(iv)
The Balance Sheet of Eastern Co. Ltd. disclosed the following position on 31 December 2008:
Assets
Plant and Machinery
Land and Building
Inventories
Accounts Receivable
Cash and Bank balances
Taka
400,000
350,000
200,000
150,000
50,000
1150,000
100,000
100,000
10,000
40,000
500,000
400,000
1150,000
Additional Information:
i.
Adequate provision has been made in the accounts for taxation.
ii. The fixed assets of the company have been adequately depreciated.
iii. The present market value of Plant and Machinery is 500,000.
iv. The turn over and net profit or losses of the company since incorporation, after charging
depreciation and taxation have been as follows:
Year
2002
2003
2004
2005
2006
2007
2008
Turnover
1100,000
1200,000
900,000
600,000
1200,000
1400,000
1750,000
Profit/(Losses)
140,000
110,000
(120,000)
40,000
100,000
150,000
170,000
The reasonable return on capital invested in the class of business done by Eastern Co. Ltd. is 10
per cent.
The loss incurred in 2004 was due to exceptional circumstances. It is expected that the
company will be able to maintain its profit for the next few years at the same level in the past.
Required: Calculate the value of goodwill of Eastern Co. Ltd. (Assume that tax rate is 40% and
also consider any further facts, if, necessary).
[Marks: (5+20) = 25]
==THE END==
33
Three hours
Full Marks:100
Q. No. 1.
(a)
Is a standard cost system equally applicable to Job Order Costing and Process Costing ?
(b)
hour
@
6.00...
Variable
Factory
Overhead
hour
2.00
Fixed
Factory
Overhead
hour
4.00..
Standard production cost per unit
Tk.
Amount (Tk.)
3.50
Tk.
3.00
Tk.
1.00
Tk.
2.00
9.50
Amount
(Tk.)
4,000
4,000
2,500
1,000
300
1,200
1,500
200
500
13,700
(a)
Marketing and administrative expenses were: variable, Tk.1 per unit sold; fixed, Tk.13,500.
(b)
Normal output for a month is 4000 units.
Required:
(1)
Compute the November equivalent production for materials and for conversion costs.
(2)
Determine the standard cost of:
(a)
Units transferred to finished goods.
(b)
Abnormal spoilage, to be charged directly to a current period expense account.
(c)
Ending inventory of work in process.
(3)
Compute the (a) materials price and quantity variances, (b) labor rate and efficiency variances,
and
(c) factory overhead variances, using the four-variance method.
[Marks: {4+(4+3+9)} = 20]
34
Additional
Processing costs
Tk.63,000
80,000
36,000
Selling price
Tk.20 per pound
13 per pound
32 per gallon
Required: Which product or products should be sold at the split-off point and which product or
products should be processed further? Show computations.
[Marks: (5+10) = 15]
Q. No. 3.
(a)
A practicing Cost and Management Accountant spends Tk.1.80 per km on taxi fare. He is
considering two other alternatives- purchasing a new small car or an old big car. The estimated
cost figures for these two alternatives are as follows:Particulars
Purchase price
Sale price after 10 years
Servicing and other fixed expenses per annum
Tax and Insurance per annum
Km. run per liter
Petrol price per litre is Tk.7. His estimated annual requirement of travel is 10,000 km. You are
required to find out:
(a)
(b)
(c)
(b)
The XYZ Company sells three products. The following is an analysis of profitability of each of the
products:
A (Rs.)
25.00
9.00
15.00
24.00
1.00
4.00%
11,000
Selling price
Variable costs
Fixed costs
Total costs
Profit
Profit % to selling price
Annual volume (in units)
35
C (Rs.)
55.00
32.00
15.00
47.00
8.00
14.50%
6,500
Express an opinion as to the usefulness of data derived from a process cost system for control of
cost.
(b)
Builder Product, A processing factory manufacturing a single product processes the same
through two departments. Particulars of expenses incurred on the different processes for a period
are given below:
Process-A:
Raw Material
Wages
Overhead expense
Total
Tk.1,50,000
Tk.1,30,000
Tk.1,45,000
Tk.4,25,000
After crediting the process account with Tk.25,000 being the estimated realizable value of waste
and by-product and Tk.40,000 against process profits, the balance is transferred to Process-B.
Process-B:
Transferred from Process-A
Tk.4,40,000
Wages
Tk.1,00,000
Overheads
Tk.1,40,000
Total
Tk.6,80,000
There is no wastage of by-product in Process-B and the output is transferred to Finished Stock
Account with a margin of 25% on total cost of Tk.6,80,000.
The Finished Stock inventories at the end of the period, show a balance of Tk.1,05,000 which has
been transferred to Balance Sheet and included under closing stock.
Required:
(i)
Prepare Process and Finished Stock Account. Can the figure be accepted and adopted
for Balance Sheet purpose?
(ii)
If not, indicate the figure which you would accept as cost of closing stock after making
such adjustments which you deem necessary.
[Marks: {5+ (10 x 2)} = 25]
36
Taka
Sales
Gross
Profit (Tk)
Number of
Sales Calls
Number of
Orders
Number of
Invoice Lines
Department Stores
1,80,000
26,000
240
120
2,100
240,000
80,000
360
580
4,600
Wholesalers
300,000
71,000
400
300
3,300
Total
720,000
177,000
1,000
1,000
10,000
Costs (Tk)
Measure of Activity
Selling.
65,000
Salespersons calls
12,000
Customers orders
Advertising
10,000
Taka sales
15,000
Invoice lines
General accounting..
18,000
Customers orders
= THE END =
37
Three hours
Full Marks:100
Answer FIVE questions taking any THREE from Part-A and TWO from Part-B including question
No. 5 which is compulsory.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.
PART A: CORPORATE LAWS
Q. No. 1.
(a)
(b)
Is there any significant difference between a prospectus and a statement in lieu of prospectus?
(c)
Suppose you have purchased shares based on a prospectus, which was eventually proved to be
false and misleading. What remedies are available to you as per the Companies Act 1994?
[Marks: (5+5+10) = 20]
Q. No. 2.
(a)
(b)
How a company can be listed with and de-listed from Stock Exchange?
(c)
Q. No. 3.
(a)
What do you mean by net capital as described in the Securities & Exchange Rules, 1987?
(b)
As per the Securities & Exchange Rules, 1987 what are the qualification of members of stock
exchange?
(c)
Under the above stated Rules, what are the financial report to be submitted to the SEC by an
issuer and when?
[Marks: (5+7+8) = 20]
Q. No. 4.
(a)
(b)
(c)
Q. No. 5.
Write short notes on any 4 (four) of the following:
(a)
(b)
(c)
(d)
(e)
(f)
Insider Trading.
Disqualification of Directors.
Directors Report.
Divisible Profit.
Appointment of Auditor.
Stock Dividend.
[Marks: (4x5) = 20]
38
(b)
Being a company secretary what are the procedure you have to follow in offering right shares?
[Marks: (5+15) = 20]
Q. No. 7.
(a)
(b)
(c)
Q. No. 8.
a)
b)
Discuss the role of a Company Secretary to uphold Corporate Governance in the organization?
[Marks: (10+10) = 20]
= THE END =
39
Full Marks:100
Q. No. 1.
(a)
What do you mean by auditors independence, integrity and objectivity as per general principles
of an audit?
(b)
Define related party transaction. How can you verify the related party transactions at the time of
audit?
(c)
What do you meant about electronic data processing (EDP) environment? Describe briefly the
basic principles of audit in an EDP environment.
[Marks: (5x3) = 15]
Q. No. 2.
(a)
What do you meant about audit Sampling? Explain the meaning of the following term in the
context of audit Sampling.
(i)
Stratified Sampling.
(ii)
Random Sampling.
(iii)
Block Sampling.
(b)
Why cost audit is essential for a manufacturing company? Write briefly the benefits enjoyed by
the management after effective implementation of cost audit.
(c)
Draw a speciment clean cost audit report for a manufacturing company.
[Marks: (10+6+4) = 20]
Q. No. 3.
(a)
What do you meant about Cut of procedure? Describe briefly the manner in which the auditor
gains satisfaction as to the physical existence of stocks.
(b)
Who are responsible for implementation of Internal control system? Why and to what extent an
internal control system mostly essential for an organization?
[Marks: (5+5) = 10]
Q. No. 4.
(a)
What do you mean by IAASB?
(b)
Describe the process of promulgation of ISA.
(c)
What are the responsibilities of management of public limited company to financial statement
under Companies Act, 1994?
[Marks: (6+6+8) = 20]
Q. No. 5.
(a)
An Auditor is expected to have an absolute basis for the expressions of an opinion. Do you
agree?
(b)
Should the auditor give an unqualified opinion on financial statement which shows stocks not
kept properly by the Management but a Management representation letter provided by the
Management during the time of audit?
[Marks: (5x2) = 10]
Q. No. 6.
(a)
Explain the meaning of the term materiality and its significance for an auditor. Why does an
auditor need to study and evaluate internal control system?
(b)
What do you meant about:
(i) Auditors Liability to third party.
(ii) Professional Competence and due care.
[Marks: (5+10) = 15]
Q. No. 7.
(a)
Briefly describe the Rights & Power of Auditor u/s 213 of the Companies Act, 1994. Can this rights
be restricted by the terms of an Auditors appointment or in any other manner?
(b)
What do you meant about electronic data processing (EDP) environment? Describe briefly the
common types of frauds that take place in EDP environment and suggest how the occurrence of
such frauds can be minimized.
[Marks: (5+5) = 10]
= THE END =
40
Q. No. 1.
(a)
What do you mean by working capital management? Explain how working capital
management policies affect profitability, liquidity and structural health.
(b)
Materials
Direct labor and variable expenses
Fixed manufacturing expenses
Depreciation
Fixed administrative expenses
Total cost
The selling price per unit is expected to be Tk.96 and the selling expenses Tk.5 per unit, 80% of which is
variable.
In the first two years of operations, production and sales are expected to be as follows:
Year
1
2
Production in units
6000
9000
Sales in Units
5000
8500
To assess the working capital requirements the following additional information is available:(a)
(b)
(c)
(d)
(e)
(f)
Stock of materials
Work in process
Debtors
Cash balance
Creditors for supply of material
Creditors for expenses
Required:
Prepare for the two years:(i)
(ii)
Q. No. 2.
(a)
JAMUNA plastic manufacturing company has been following a dividend policy which can
maximize the market value of the firm as per Walters model. Accordingly, each year at dividend
time, the capital budget is reviewed in conjunction with the earnings for the period and
alternative investment opportunities for the shareholders. In the current year, the firm reports net
earnings of Tk. 5,00,000. It is estimated that the firm can earn Tk. 1,00,000 if the amounts are
retained. The investors have alternative investment opportunities that will yield them 10%. The firm
has 50,000 shares outstanding. What should be the dividend payout ratio of the company if it
wishes to maximize the wealth of the shareholders?
(b)
Calculate the degree of operating leverage, financial leverage and combined leverage for the
following firms and interpret the results, given the following data.
41
Output (units)
3,00,000
75,000
5,00,000
3,50,000
7,00,000
75,000
1.00
7.50
0.10
25,000
40,000
Nil
3.00
25.00
0.50
Ratios can be classified into five broad groups What are these? Explain.
As a financial analyst of M/S. PHILIPS BANGLADESH LTD. you are required to determine the
weighted average cost of capital of the company using (i) book value weights and (ii) market
value weights. The following information is available for your perusal.
The companys present book value capital structure is:
Debentures (Tk. 100 per debenture)
Tk. 8,00,000
2,00,000
10,00,000
20,00,000
All these securities are traded in the capital markets. Recent prices are:
Debentures, Tk. 110 per debenture
Preference share, Tk. 120 per share
Equity shares, Tk. 22 per share
Anticipated external financing opportunities are:
i)
Tk. 100 per debenture redeemable at per; 10 year maturity, 13 per cent coupon rate, 4 per
cent flotation costs, sale price, Tk. 100.
ii)
Tk. 100 preference share redeemable at per; 10 year maturity, 14 per cent dividend rate, 5
per cent flotation cost, sale price, Tk. 100.
iii)
Equity share: Tk. 2 per share flotation cost, sale price = Tk. 22
In addition, the dividend expected on the equity share at the end of the year is Tk. 2 per share;
the anticipated growth rate in dividend is 7 per cent and the firm has the practice of paying all
its earnings in the form of dividends.
The corporate tax rate is 35 per cent.
[Marks: (5+15) = 20]
Q. No. 4.
POLIMER plc has decided it must replace its major turbine machine on 31 December 2009. The
machine is essential to the operations of the company. The company is, however, considering whether
to purchase the machine outright or to use lease financing.
Purchasing the machine outright
The machine is expected to cost Tk.360,000 if it is purchased outright, payable on 31 December 2009.
After four years the company expects new technology to make the machine redundant and it will be
sold on 31 December 2013 generating proceeds of Tk.20,000. Capital allowances for tax purposes are
available on the cost of the machine at the rate of 25% per annum reducing balance. A full years
allowance is given in the year of acquisition but no writing down allowance is available in the year of
disposal. The difference between the proceeds and the tax written down value in the year of disposal is
allowable or chargeable for tax as appropriate.
42
Annual rental
Tk.135,000
Tk.140,000
31 December 2010
31 December 2009
For both the purchasing and the finance lease option, maintenance costs of Tk.15,000 per year are
payable at the end of each year. All lease rentals (for both finance and operating options) can be
assumed to be allowable for tax purposes in full in the year of payment. Assume that tax is payable one
year after the end of the accounting year in which the transaction occurs. For the operating lease only,
contracts are renewable annually at the discretion of either party. POLIMER plc has adequate taxable
profits to relieve all its costs. The rate of corporation tax can be assumed to be 30%. The companys
accounting year-end is 31 December. The companys annual after tax cost of capital is 10%.
Required:
Calculate the net present value at 31 December 2009, using the after tax cost of capital, for
(i)
(ii)
(iii)
Using the operating lease to acquire the machine. Recommend the optimal method.
[Marks: 20]
Q. No. 5.
(a)
Explain the exchange rate system that existed during the 1950s and 1960s. How does todays
exchange rate system differ?
(b)
PURBO Cordage Company is considering the acquisition of SUMY Wire and Mesh Corporation
with stock. Relevant financial information is as follows:
PURBO
SUMY
Tk. 4,000
Tk. 1,000
2,000
800
Tk. 2.00
Tk. 1.25
12x
8x
PURBO plans to offer a premium of 20 percent over the market price of SUMY stock.
(i)
What is the ratio of exchange of stock? How many new shares will be issued?
(ii)
What are earnings per share of the surviving company immediately following the merger?
(iii)
If the price/ earnings ratio stays at 12 times, what is the market price per share of the
surviving company? What would happen if it went to 11 times?
[Marks: (6+14) = 20]
= THE END =
43
Three hours
Full Marks:100
Q. No. 1.
The Managing Director of M/s. ABC Ltd. has been planning to acquire a Bus available for use by the
Companys staff. The Bus that the company wishes to acquire can be either purchased or leased
from the manufacturer. The company has made the following evaluation of the two alternatives.
Purchase alternative:
If the Bus is purchased, then the costs incurred by the company would be as follows:
Purchase cost of the Bus
Annual cost of servicing, licenses and taxes
Repairs:
First three years, per year
Fourth year
Fifth year
Tk.8,50,000
9,000
3,000
5,000
10,000
The Bus would be sold after five years. Based on current resale values, the company would be able to
sell it for about one-half of its original cost at the end of the five-year period.
Lease alternative:
If the Bus is leased, then the company would have to make an immediate deposit of Tk.50,000 to
cover any damage during use. The lease would run for five years, at the end of which time the deposit
would be refunded. The lease would require as annual rental payment of Tk.2,00,000 (the first payment
is due at the end of year-1). As part of this lease cost, the manufacturer would provide all servicing and
repairs, license the Bus, and pay all taxes. At the end of the five year period, the Bus would be
reverted to the manufacturer as owner.
The cost of capital of the company is 18%.
Required:
(a)
Use the total cost approach to determine the present value of the cash flows associated with
each alternative. Ignore income taxes. The present value factor of Taka 1 at 18% cost of capital
for 1-5 years period is 3.127 while it is 2.174 for 1-3 years period and 0.516 for the 4th year and 0.437
for the 5th year.
(b)
Which alternative would you recommend that the company should accept? Why?
[Marks: (15+5) = 20]
Q. No. 2.
M/s. Jaypur Hat Company has two divisions. The Mining Division makes Toldine, which is then
transferred to the Metals Division. The Toldine is further processed by the Metals Division and is sold to
customers at a price of Tk.150 per unit. The Mining Division is currently required by the company to
transfer its total yearly output of 4,00,000 units of Toldine to the Metals Division at 110% of full
manufacturing cost. Unlimited quantities of Toldine can be purchased and sold on the outside market
at Tk.90 per unit.
The following table gives the manufacturing costs per unit in the Mining and Metals Divisions for 2009:
Direct materials
Direct manufacturing labour costs
Manufacturing overhead costs
Total manufacturing costs per unit
Mining Division
Tk.12
16
32
Tk.60
44
Metals Division
Tk.6
20
25
Tk.51
Calculate the operating incomes for the Mining and Metals Divisions for the 4,00,000 units of
Toldine transferred under the following transfer-pricing methods:
(i)
(ii)
(b)
Suppose the company rewards each divisions manager with a bonus, calculated as 1% of
division operating income (if positive). What is the amount of bonus that will be paid to each
division manager under the transfer-pricing methods in requirement (a)? Which transfer-pricing
method will each division manager prefer to use?
(c)
What arguments would the manager of the Mining Division make to support the transfer-pricing
method that he prefers?
[Marks: (12+5+3) = 20]
Q. No. 3.
M/s. Dhaka Medical Instruments Company is considering JIT (Just-in-time) purchasing policy
implementation in 2010. The companys annual demand for a product XJ-200, a surgical instrument is
20,000 units. If the company implements JIT, the purchase price of the product XJ-200 is expected to
increase from Tk.10 to Tk.10.05 because of frequent deliveries by M/s. Mirpur Manufacturing Industries
Ltd. M/s. Mirpur Manufacturing Industries enjoy a sterling reputation for quality and reliability. Ordering
costs will remain at Tk.5 per order. However, the annual number of orders placed will be 200 instead of
the current 20. As a result of frequent ordering, the order size of M/s. Dhaka Medical Instruments
Company will decrease proportionately. Dhaka Medical Instruments Companys required rate of return
on investment is 20%. Other carrying costs (insurance, materials handling and so on) will remain at
Tk.4.50 per unit. Currently the Dhaka Company has no stockout costs. Lower inventory levels from
implementing JIT will lead to Tk.3 per unit stockout costs on 100 units during the year.
Required:
(a)
Calculate the estimated Taka savings (loss) for M/s. Dhaka Medical Instruments Company from
adoption of JIT purchasing policy.
(b)
Under what conditions would it be beneficial for M/s. Dhaka Medical Instruments Company to
have management from M/s. Mirpur Manufacturing Industries Ltd. for all inventories in the supply
chain?
[Marks: (15+5) = 20]
Q. No. 4.
Consider the following data for the two geographical divisions of M/s. Chittagong Electric Company
that operate at profit centers:
Total assets
Current liabilities
Operating income
Rajshahi Division
Tk.10,00,000
2,50,000
2,00,000
45
Khulna Division
Tk.50,00,000
15,00,000
7,50,000
Calculate the ROI (Return on Investment) for each division using operating income as the
measure of income and total assets as the measure of investment.
(b)
(c)
M/s. Chittagong Electric Company has two sources of funds: Long-term debt with a market value
of Tk.35,00,000 and interest rate of 10%, and equity capital with a market value of Tk.35,00,000 at
a cost of equity of 14%. The companys income tax rate is 40%. The Chittagong Electric Company
applies the weighted-average cost of capital to both divisions, because each division faces
similar risks. Calculate the EVA (Economic Value Addition) for each division. Which of the
measures calculated in requirements (a), (b) and (c) would you recommend Chittagong Electric
Company to use? Why? Explain.
[Marks: (5+5+10) = 20]
Q. No. 5.
(a)
Explain the condition when conflicting ranking would be given by IRR and NPV to the mutually
exclusive project?
(b)
What should be the criteria for Management to adopt a particular performance measure?
(c)
(d)
= THE END =
46
Three hours
Full Marks:100
Answer any THREE questions from Group-A and TWO question from Group-B.
All questions carry equal marks.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.
PART A: STRATEGIC MANAGEMENT
Q. No. 1.
(a)
(b)
(c)
Q. No. 2.
(a)
(b)
(c)
Q. No. 3.
(a)
What are the elements to be incorporated in the mission statement of a company? Discuss those
elements in brief.
(b)
(c)
How a company should communicate the strategic vision down the line to lower-level managers
and employees? Discuss in brief.
[Marks: (9+5+6) = 20]
Q. No. 4.
(a)
(b)
(c)
Q. No. 5.
Discuss any four of the following:
(i)
Strategy and Entrepreneurship
(ii)
Strategic Vision and Strategic Mission
(iii)
Company Competence and Competitive Capability
(iv)
Unbundling and Outsourcing
(v)
Joint Venture and Strategic Partnership
(vi)
Strategic Objectives and Financial Objectives
[Marks: (5 4) =
20]
47
Q. No. 6.
(a)
(b)
(c)
Q. No. 7.
(a)
(b)
(c)
Q. No. 8.
(a)
What do you mean by group structure? What are the group structural variables?
(b)
Is there any difference between role conflict and role ambiguity? Give a practical example from
your position that makes the distinction more clear?
(c)
= THE END =
48
Enumerate the provisions of the Companies Act, 1994 and Cost Audit Ordinance/Rules regarding
qualification, appointment and removal of a Cost Auditor of a Company.
(b)
Discuss the provisions of professional misconduct in relation to Cost Accountants in respect of his
professional duties.
[Marks (8+8) = 16]
Q. No.3.
(a)
(b)
(c)
Cost accounting and cost audit are effective management control mechanisms and as such, a
management tool. Briefly discuss.
Cost audit Is an aid to shareholders of corporate bodies and to Government briefly discuss.
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.
[Marks (6+6+6) = 18]
PART B: MANAGEMENT AUDITING (MARKS: 50)
Q. No. 4.
(a)
Management auditors act as consultants both to senior management and to the board of
directors of a manufacturing company. Briefly explain.
(b)
What is the importance of management audit report? Briefly discuss the essential features and
contents of a management audit report.
[Marks (6+8) = 14]
Q. No.5.
(a)
Distinguish between principle-based and law-based Corporate Governance. How far SEC
circular is in conformity with other countries?
(b)
You are the management auditor of a manufacturing company. State various techniques you
would adopt in measuring the performance of resources of Factory.
[Marks (8+8) = 16]
Q. No. 6.
(a)
(b)
(c)
Why many industries are relocated from the developed countries to the LDC like Bangladesh? Do
you find it a sign of localization of industries or development of the nation?
Why e-business with foreign countries and e-transactions involving foreign exchange could not
be implemented in Bangladesh?
Who does dictate disclosure requirements of audited financial statements of scheduled banks,
insurance companies, listed companies and Private Limited Companies? Why?
.
[Marks (7+ 5+8) = 20]
THE END
********
49