ICMA Questions Dec 2009

1

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA DECEMBER 2009 EXAMINATION

FOUNDATION LEVEL (NEW) 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. 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) Distinguish between perpetual and periodic inventory system. (b) D & E Company has the following inventory, purchases and sales for the month of March, 2008

Inventory March 1 200 units @ Tk. 4.00 Tk. 800 Purchase March 10 500 unit @ Tk. 4.50 Tk. 2,250 Purchase March 20 400 unit @ Tk. 4.75 Tk. 1,900 Purchase March 30 300 unit @ Tk. 5.00 Tk. 1,500 Sales March 15 500 units Sales March 25 400 units The physical inventory count on March 31, 2008 shows 500 units on hand.

Required: Under periodic inventory system, determine the cost of inventory on hand at March 31, 2008 and cost of goods sold for March under the (a) First in First out (FIFO) method (b) Last in First out (LIFO) method and (c) weighted average cost method.

[Marks : {5+(5x3)} = 20]

2

CMA DECEMBER 2009 EXAMINATION FOUNDATION LEVEL (NEW) SUBJECT : 001. PRINCIPLES OF ACCOUNTING

Q. No. 3.

S. A. Merchant maintains two bank accounts No.-1 account is his business account and No.-2 account

is his private account. On June 30, 2006, there was a balance of Tk.890 outstanding to his credit in No.-1

account.

It is discovered that:

(a) The receipt column of the cash book has been overcast by Tk.1,000.

(b) Cheques outstanding to Tk.3,760 entered in the cash book as paid into the bank have not been

cleared.

(c) Cheques issued amounting to Tk.5,230 have not been presented.

(d) Discount allowed Tk.110 has been included through mistake in the cheque entered in the bank

column of the cash book.

(e) A trade credit note Tk.290, was received in June, 2006, but not recorded in the books.

(f) 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.

(g) 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) Make the appropriate correction/adjustment in the cash book.

(ii) Prepare a bank reconciliation statement to show the bank balance as per No.-1 account.

[Marks: (5+15) = 20]

Q. No. 4.

The following selected transactions relate to ABC Company:

March-1: Sold on credit Tk.20,000 to Aziz Brothers Terms 2/0, n/30.

March-11: Received payment in full from Aziz Brothers for balance due.

March-12: Accepted Juno Companys Tk.20,000; 6 months 12% note for balance due.

March-13: Made ABC Company Credit Card sales for Tk.13,200.

March-15: Made American Express Credit Card sales totaling Tk.6,700. A 5% service fee is charged.

March-30: American express company made full payment.

April-11: Sold Accounts Receivable of Tk.8,000 to XYZ factor. They take a service charge of 2% of

the account of receivables sold.

April-13: Received collections of Tk.8,200 on ABC Company credit card sales and added finance

charges of 1.5% on the remaining balances.

May-10: Wrote off as uncollectible Tk.16,000 of Accounts Receivable. ABC uses the percentage of

sales as basis to estimate bad debts.

June-30: Credit sales for the first six months total Tk.20,00,000. The bad debts percentage is 1% of

credit sales. At June 30, the balance in the allowance account is Tk.3,500.

July-16: One of the accounts receivable written off in May was from Mr. Salim who pays the

amount due Tk.4,000 in full.

Required:

Prepare the journal entries for the above transactions.

[Marks: 20]

Q. No. 5.

(a) Distinguish between Capital Expenditure & Revenue Expenditure.

(b) Distinguish between Cash basis Accounting & Accrual basis Accounting.

(c) Distinguish between current and non-current liabilities.

(d) Explain the concept of business entity and going concern.

(e) Depreciation is a process of allocating cost for wear and tear, not a process of valuation Explain.

[Marks: (4x5) = 20]

==THE END==

3

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA DECEMBER-2009 EXAMINATION

FOUNDATION LEVEL (NEW)

SUBJECT: 002-BUSINESS COMMUNICATION AND OFFICE MANAGEMENT

Time: 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.

PART A: BUSINESS COMMUNICATION Q. No. 1.

(a) An effective communication is the key to success Discuss. (b) What are the barriers of effective communication?

(c) Differentiate between internal and external communication with examples.

[Marks: (5+5+5) = 15]

Q. No. 2.

(a) Define Business report.

(b) What are the steps to be followed in writing a successful report?

(c) Draft a statutory report of a company for presenting the same to the share holders meeting.

[Marks: (3+5+7) = 15]

Q. No. 3.

(a) Draft a Notice for holding the Annual General Meeting of a publicly listed Company.

(b) Draft an introductory letter to a new prospect highlighting your interest to make a business

relation with them.

(c) Write a letter to the Register of Joint Stock Company to allow three months time extension to hold

the AGM of your Company.

[Marks: (5+5+5) = 15]

Q. No. 4.

Write short notes on any FIVE of the following:

(a) Credit Rating

(b) Extra Ordinary General Meeting

(c) Proxy to AGM

(d) I.P.O.

(e) Automated teller machine (ATM)

(f) Bonded warehouse

(g) World Bank

(h) Capital Market

(i) Independent Director of a listed Company

[Marks: (4 5) = 15]

PART B: OFFICE MANAGEMENT Q. No. 5.

(a) What is the objective of office Management?

(b) Discuss the Major functions of office Management.

(c) Discuss the principles of scientific office Management

[Marks: (3+6+6) = 15]

Q. No. 6.

(a) What do you mean by selection of office location?

(b) What are the factors to be considered in selecting office building site?

(c) Discuss the effects of the office environment on Employees.

[Marks: (3+6+6) = 15]

Q. No. 7.

(a) How do you define office employee.

(b) Relationship between employer and employee of an organization is must. Do you agree with this comment? Why?

(c) Discuss the methods of scientific filing system of office record.

[Marks: (3+6+6) = 15]

Q. No. 8.

Write short notes on any five of the followings:

(a) Mobile Banking (b) Business ethics

(c) Co-ordination of office management (d) Office decoration.

(e) Job rotation of office work. (f) Record Management program.

(g) Share market

[Marks: (5 4) = 20]

= THE END =

4

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

CMA DECEMBER-2009, EXAMINATION


SUBJECT: 003. QUANTITATIVE TECHNIQUES.


Answer any TEN questions, FIVE from each part. All questions carry equal marks; the notations refer to usual meanings. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

PART A : BUSINESS MATHEMATICS

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) In how many ways can the letters of the word ARRANGE be arranged? How many of these arrangements are there in which-

(i) the two Rs come together,

(ii) the two Rs do not come together,

(iii) the two Rs and the two As come together?

[Marks: (5 + 5) = 10]

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) Prove that (i) log 2 log 2log 3 81 = 2 and

(ii) 2log(x+y) = logx + logy + 3log2 if x2+y2 = 6xy.

[Marks: (5 + 5) = 10]

5




Q. No. 6.

(a) Find the inverse of the matrix A where:

A =

2

0

4

2

10

2

1

9

3

(b) A businessman invest Tk.50,000 at 6% compounded semi-annually. Find the compound interest

and compound amount after 3 years.

[Marks: (5 + 5) = 10]

Q. No. 7.

(a) If y = (x3+3) log(2x+1), find dx

dy . (b) If x3 3x2y + 2y2 5 = 0, find

dx

dy .

[Marks: (5 + 5) = 10]

PART B: BUSINESS STATISTICS Q. No. 1.

(a) Distinguish between Karl Pearsons and Bowleys co-efficient of Skewness.

(b) You are given the following data pertaining to kilowatt hours of electricity consumed by 100

persons in Dhaka city:

Consumption (kwh) 0 - 10 10 20 20 30 30 40 40 50

No. of users 6 25 36 20 13

Calculate: (i) Arithmetic mean (ii) Standard deviation

[Marks : (4+6) = 10]

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 Frequency Income Frequency

Below 500 90 1500 -2000 80

500 1000 150 2000 2500 70

1000 - 1500 100 2500 and over 10

[Marks : (4+6) = 10]

6




Q. No. 4.

(a) Define the coefficient of correlation. What is it intended to measure?

(b) Two house wives, Rozi and Lozi, asked to express their preference for different kinds of detergents,

gave the following replies:

Detergent Rozi Lozi

A 4 4

B 2 1

C 1 2

D 3 3

E 7 8

F 8 7

G 6 5

H 5 6

I 9 9

J 10 10

To what extent the preferences of these two ladies go together?

[Marks : (4+6) = 10]

Q. No. 5.

(a) 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 2000 2001 2002 2003 2004

Sales Tk. million 12 18 20 23 27

[Marks : (4+6) = 10]

Q. No. 6.

(a) Define dispersions. What are the measures of dispersion?

(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 Co. B

700 900 10 3

900 1100 16 42

1100 1300 26 12

1300 1500 8 3

Which companys Lamp should be preferred by the buyer and why?

[Marks : (4+6) = 10]

Q. No. 7.

Write short notes on the following:

(a) Probability and non-probability sampling.

(b) Dispersion and measures of dispersion.

(c) Skewness and Kurtosis.

[Marks : (3+4+3) = 10]

= THE END =

7


CMA DECEMBER 2009 EXAMINATION FOUNDATION LEVEL (NEW)

SUBJECT : 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS

Time : Three Hours Full Marks 100

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) How does knowledge of economics help efficient management of business?

(b) Distinguish between economic profit and business profit. (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.

[Marks : (6+6+8) = 20]

Q. No. 2.

(a) 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) Distinguish between Perfect Competition and Monopoly market.

(b) Show how price is determined under perfect competition.

(c) Give example of one product in the market of:

i. Oligopoly,

ii. Monopolistic Competition, and

iii. Perfect Competition.

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

Q. No. 4.

(a) Distinguish between

i. Fixed cost and Variable cost, and

ii. Internal economies and External Economies of firms

(b) State the law of diminishing return and indicate exceptions to this law.

(c) Calculate average cost, marginal cost, marginal revenue, average revenue and profit from the

following information

Units of Output Total Cost

(Tk.)

Variable Cost

(Tk.)

Fixed Cost

(Tk.)

Total Revenue

(Tk.)

1 300 200 100 150

2 350 250 100 250

3 400 300 100 400

4 450 350 100 500

5 550 450 100 600

6 610 510 100 650

7 670 570 100 700

8 750 650 100 760

(d) 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]

8

CMA DECEMBER 2009 EXAMINATION FOUNDATION LEVEL (NEW)

SUBJECT : 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS

Q. No. 5.

(a) Distinguish between:

i) GDP and National Income; and

ii) National Income at market price and National Income at factor cost.

(b) Calculate GDP and National Income of Bangladesh during 2008-2009 from the following

information

Dollars in Crores

Gross Private Investment 2500

Government Purchase of goods and Services 500

Personal Consumption of goods and Services 3500

Depreciation Charges 150

Exports 1650

Imports 1850

Value of Shares purchased during the year 150

Value of Second hand computer purchased in the country 50

Purchase of land during the year 120

Gains from sale of old cars during the year 150

[Marks : (8+12) = 20]

GROUP B : INTERNATIONAL BUSINESS Q. No. 6.

(a) What is the usual procedure of exports from and imports to Bangladesh?

(b) What should be the trade strategies for Bangladesh to get maximum possible gains from

International business?

(c) What are the factors of competitive advantages of a nation?

[Marks : (8+6+6) = 20]

Q. No. 7.

(a) Define foreign exchange rate.

(b) Describe the different methods of determining foreign exchange rate.

(c) How is foreign exchange rate determined in Bangladesh?

[Marks : (4+9+7) = 20]

Q. No. 8.

(a) What is FDI ?

(b) Critically evaluate the risks of FDI ?

(c) Why do you think FDI is not coming to Bangladesh ?

[Marks : (3+9+8) = 20]

=THE END=

9



PROFESSIONAL LEVEL-I (NEW)

SUBJECT: 101. INTERMEDIATE FINANCIAL ACCOUNTING.



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 Dr. (Tk) Cr. (Tk)

Cash 1,20,000

Investment in Land 1,70,000

Customer Receivable 3,02,000

Inventory 56,000

Prepaid Expenses 54,000

Land 2,60,000

Plant & Machineries 11,67,000

Other Assets (non current) 15,63,000

Sales on Accounts 10,50,000

Contractor Payable 2,40,000

Accrued Wages 2,20,000

Unearned Revenue 33,000

Debentures 12,00,000

Other Liabilities 3,36,000

Common Stock 2,90,000

Retained Earnings 11,08,000

Cash Sales 19,00,000

Interest Revenue 23,000

Gain on Condemnation of Land by Govt. 2,00,000

Cost of Goods Sold 15,65,000

Commercial and General Overhead 6,40,000

Loss from tidal bore charge 1,50,000

Financial Expenses 70,000

Income Tax 2,73,000

Operating Loss on discontinued business 60,000

Dividends 1,00,000

Sales Allowances 50,000

Total 66,00,000 66,00,000

Additional Information:

(i) Inventory includes spoiled & not salable goods worth Tk. 6,000.

(ii) Commercial and General Overhead incorrectly includes Tk. 15,000 for office furniture purchases

(other assets). The purchases were made on December30. (iii) The prepaid expenses were paid on September 1 and relate to a 3 years insurance policy that

went into effect on September1. (iv) 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. (v) Plant & Machineries includes Tk. 10,000 for equipment repairs that were erroneously recorded as

machineries purchases. The repair made on December30. (vi) 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.

(vii) 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.

10




Q. No. 1. (Contd..)

Required:

(i) Adjusting Entries needed for above transaction;

(ii) Income Statement for the year ended December 31, 2008; and

(iii) Balance Sheet as on December 31, 2008.

[Marks: (5 + 15) = 20]

Q. No. 2.

(a) Define cash equivalents and non-cash transactions as per IAS - 7.

(b) A portion of the Mower Companys Balance Sheet appears bellow:

December 31, 2008 December 31, 2007

Assets:

Cash 3,53,300 50,000

Notes Receivable - 25,000

Inventory To be determined 1,99,875

Liability:

Accounts Payable 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) Compute the number of units sold during 2008

(ii) Compute the December 31 2008 Accounts Payable Balance. (iii) Compute the beginning inventory quantity.

(iv) Compute the ending inventory quantity & value.

(v) Prepare an income statement for 2008 (including a detailed COGS section). Ignore

Income Tax.

[Marks: (5 + 15) = 20]

Q. No. 3.

(a) Distinguish between financial depreciation and physical depreciation of assets.

(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 2,00,000

Accumulated Depreciation as of July 02, 2002 1,50,000

Average published retail value 42,000

New Taxi:

Listed Price 2,50,000

Cash Price without trade-in 2,25,000

Cash paid with trade-in 1,95,000

Instruction: Give the journal entry on Simantos books to record the purchase of the new Taxi.

11

[Marks: (6 + 8 + 6) = 20]

12




Q. No. 4.

(a) Cash flow statements are a valuable source of information. However, there may be certain

important non-cash transactions; give 4 (four) examples of such transactions.

(b) The following schedule shows the account balances of Eldora Company at the beginning and

end of the fiscal year ended October31, 2008.

Debits October 31,2008

(Amount in Taka)

November 1,2007

(Amount in Taka)

Increase(Decrease)

(Amount in Taka)

Cash 2,26,000 50,000 1,76,000

Accounts Receivable 1,48,000 1,00,000 48,000

Inventories 2,91,000 3,00,000 (9,000)

Prepaid Insurance 2,500 2,000 500

Long-Term Investment (at cost) 10,000 40,000 (30,000)

Sinking Fund 90,000 80,000 10,000

Land and Building 1,95,000 1,95,000 ---

Equipment 2,15,000 90,000 1,25,000

Discount on Bonds Payable 8,500 9,000 (500)

Treasury Stock (Cost) 5,000 10,000 (5,000)

Cost of Good Sold 5,39,000 ----- 539,000

Selling and General Expenses 2,87,000 ----- 287,000

Income Tax 35,000 ------ 35,000

Loss on Sale of Equipment 1,000 ------ 1,000

Total Debits 20,53,000 8,76,000 11,77,000

Credits October 31,2008

(Amount in Taka)

November 1,2007

(Amount in Taka)

Increase(Decrease)

(Amount in Taka)

Allowance for Doubtful Accounts 8,000 5,000 3,000

Accumulated Depreciation-Building 26,250 22,500 3,750

Accumulated Depreciation-Equipment 39,750 27,500 12,250

Accounts payable 55,000 60,000 (5000)

Notes Payable-Current 70,000 20,000 50,000

Miscellaneous Expenses Payable 18,000 15,000 3,000

Taxes Payable 35,000 10,000 25,000

Unearned Revenue 1,000 9,000 (8000)

Notes Payable-Long Term 40,000 60,000 (20000)

Bonds Payable-Long Term 2,50,000 2,50,000 ------

Common Stock 3,00,000 2,00,000 1,00,000

Retained Earnings Appropriated for Sinking Fund 90,000 80,000 10,000

Unappropriated Retained Earnings 94,000 1,12,000 (18000)

Paid-in Capital in Excess of Par Value 1,16,000 5,000 1,11,000

Sales 8,98,000 ------ 898,000

Gain on Sale of Investments 12,000 ------ 12,000

Total Credits 20,53,000 8,76,000 11,77,000

The following information was also available:

(a) All purchase and sales were on account.

(b) The sinking fund will be used to retire the long-term bonds.

(c) Equipment with and original cost of Tk15,000 was sold for Tk.7000.

(d) Selling and general expenses include the following expenses:

Building depreciation Tk.3,750

Equipment depreciation Tk.19,250

Doubtful accounts expenses Tk.4,000

Interest expenses Tk.18,000

(e) A six-month note payable for Tk.50,000 was issued forward the purchase of new equipment.

(f) The long-term note payable requires the payment of Tk.20,000 per year plus interest until paid.

(g) Treasury stock was sold for Tk.1,000 more than its cost.

(h) All dividends were paid by cash.

Required:

Prepare statement of cash flow for 2008. Also show your workings.

[Marks: (4+16) = 20]

13




Q. No. 5.

(a) Distinguish between depreciation, depletion, and amortization.

(c) Analysis of the December bank statement for Locomotive Company discloses the following

information:

(i) Statement balance at December 31, 2008 was Tk.33,350

(ii) Check issued by Ludmia Corporation for Tk.630 was charged to Meghan Company in error.

(iii) December bank charges were Tk.60

(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) Receipts on December 31 were Tk.9,000. Receipts were deposited on January 2

(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. Give all entries required on the books at December 31, 2008.

[Marks: (5+15) = 20]

= THE END =

14



PROFESSIONAL LEVEL- I (NEW)

SUBJECT: 102. COST ACCOUNTING.



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 Taka

Finished goods, December 31, 2008 50,000

Supplies, January 1, 2008 3,000

Property Tax 15,000

Income Tax 17,000

Raw Material, December 31, 2008 25,000

Payroll 98,000

Purchase Discount 4,000

Work-in-Process, January 1, 2008 60,000

Material Purchase 90,000

Work-in-Process, December 31, 2008 39,000

Finished Goods, January 1, 2008 70,000

Freight in 10,000

Supplies used 12,000

Freight out 15,000

Supplies, December 31, 2008 2,000

Raw Material, January 1, 2008 15,000

Purchase Returns and Allowances 10,000

Rent 20,000

Depreciation:

Factory Building 8,000

Factory Plant 9,000

Office Building 7,000

Office Furniture 6,000 30,000

Interest on Borrowings 23,000

Insurance 11,000

Utility 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) 80% of rent is related to factory.

(3) 80% of property tax and 70% of utility is related to factory.

(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]

15




Q. No. 2.

Five-Star Hotel received a single invoice covering supply of five materials for which five orders were

placed. Extract of the invoice is reproduced below:

Material description Order ref. Unit Unit price Qty. Total value (Tk.)

Ferus Sulphate 071 Gram Tk.25 1,000 25,000

Driet Execicate 075 Kg. Tk.160 200 32,000

PVC compound 132 Kg. Tk.212 175 37,100

Chemical 185 Ibs Tk.25 1,100 27,500

Dyes 205 Ibs. Tk.32 550 17,600

Tk.1,39,200

Fright 2,500

C & F Tk.1,41,700

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 Usage Forecast

January 475 490

February 480 490

March 490 475

April 500 485

May 510 500

June 520 510

July 500 510

August 490 510

September 485 500

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) A schedule showing the safely stock required.

(b) The safely stock required if the lead time is 2(two) months.

[Marks: (10+5) = 15]

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.

16




Q. No. 4. (Contd..)

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 : 25,000 machine hours

Practical Capacity : 15,000 machine hours

Normal Capacity : 8,000 machine hours

Expected Actual Capacity : 10,000 machine hours

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 =

17


CMA DECEMBER 2009 EXAMINATION

PROFESSIONAL LEVEL I (NEW)

SUBJECT: 103. MANAGEMENT AND MARKETING MANAGEMENT

Time : Three hours Full Marks: 100

Answer any THREE questions from each part.

Answer must be brief, relevant, neat and clean

Start answering each question from a fresh sheet.

PART A: MANAGEMENT (TOTAL MARKS-50)

Q. No. 1.

(a) What is management?

(b) Describe the basic managerial roles and skills.

(c) How can a manager successfully face the contemporary management challenges?

Marks : (5+6+5) = 16

Q. No. 2.

(a) Discuss the significance of environment and culture on managing an organization.

(b) What are the responsibilities of a manager with regard to environment and culture of an

organization?

(c) Describe how to develop and nourish organizational culture.

Marks : (5+6+5) = 16

Q. No. 3.

(a) What do you mean by TQM?

(b) What are the basic features of TQM?

(c) Why is TQM getting so much importance in to-days management?

Marks : (5+6+5) = 16

Q. No. 4.

(a) Explain the meaning of motivation, motivators and satisfaction.

(b) To what extent and how is money an effective motivator?

(c) Explain the various leading theories of motivation and their strengths & weaknesses.

Marks : (5+6+5) = 16

Q. No. 5.

(a) What is an assessment centre? How does it work?

(b) What is the system approach to selection of managers? How does it differ from other

approaches?

(c) Do you think managers should be appraised regularly? If so, how?

Marks : (5+6+5) = 16

Two marks are reserved for neatness and relevance

18

CMA DECEMBER 2009 EXAMINATION


SUBJECT: 103. MANAGEMENT AND MARKETING MANAGEMENT

PART B: MARKETING MANAGEMENT (TOTAL MARKS-50)

Q. No. 6.

(a) What is meant by an effective marketing strategy?

(b) How can a marketer develop effective marketing strategies?

(c) Discuss the marketing strategies for a market leader.

Marks : (5+6+5) = 16

Q. No. 7.

(a) Assess the importance of analyzing consumer buying behavior.

(b) State and explain the factors affecting consumers buying behavior.

(c) What is SWOT analysis and why is it done?

Marks : (5+6+5) = 16

Q. No. 8.

(a) Do you think that market segments and market sectors are alike? Explain.

(b) Discuss the bases of market segmentation.

(c) What are the advantages of market segmentation?

Marks : (5+6+5) = 16

Q. No. 9.

(a) Outline the major characteristics affecting consumer behaviour.

(b) Illustrate different types of buying decision behaviour.

(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) Is E-business an effective alternative to conventional business practice? Why?

(b) How would you assess the potential foreign market if you are interested to get access of it?

(c) What are the major risks involved in International business?

Marks : (5+6+5) = 16

Two marks are reserved for neatness and relevance

==THE END==

19


CMA DECEMBER-2009 EXAMINATION


SUBJECT: 104. INFORMATION TECHNOLOGY.

Time: 2 hours 30 minutes Full Marks: 80

Questions are of equal marks. Answer any FOUR questions. Answer must be brief, relevant, neat and clean. 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) Compare the traditional data entry with source data automation.

(b) Explain the necessity of database maintenance in the Transaction Processing System.

(c) What is the final output of Transaction Processing? Explain.

Marks : (6+8+6) = 20

Q. No. 5.

(a) Describe technology infrastructure required to support E-commerce and M-commerce.

(b) What are the steps to be taken to digitalize NBR (National Board of Revenue) of Bangladesh?

Marks : (10+10) = 20

Q. No. 6.

Write short notes on:

(a) System software & application software.

(b) Digital subscribers line. (c) Virtual Reality.

(d) SAP.

(e) Knowledge Management System.

Marks : (5 x 4) = 20

==THE END==

20



PROFESSIONAL LEVEL II (NEW)

SUBJECT: 201-ADVANCED FINANCIAL ACCOUNTING-I

Time: Three hours Full Marks: 100


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 Tk. Payment Tk.

Cash on account of credit sales 42,760 Creditors 39,540

Cash sales 18,630 Wages 7,430

General Expenses 6,270

Capital 2,000 Machinery (1-7-08) 1,600

_______ Drawings 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) Depreciation @ 10% for plant and Machinery.

(ii) Tk.500 to be provided for bad debts.

(iii) General expenses include Tk.1,400 paid as life insurance premium.

(iv) Wages include Tk.150 paid for erection of new machinery.

(v) A sum of Tk.350 for goods supplied to the proprietor was included in the debtors balance at

31.12.2008

(vi) The amount of Tk.8,170 due to creditors on 31.12.2008 includes admission of an old claim by a

creditor of Tk.600 relating to purchases before 01.01.2008, but the claim was not shown in the

balance sheet as on 31.12.2007.

[Marks: (10+10) = 20]

Q. No. 2.

Please write the answer in the context of the Framework for the preparation and presentation of

Financial statements.

(a) What are the objectives of Financial Statements?

(b) Describe the four principal qualitative Characteristics that determine the usefulness of

information in the financial statement.

(c) Explain the two concepts of capital maintenance. What is the principal difference between

the two concepts?

[Marks: (5+5+10) = 20]

Q. No. 3.

Mr. Karim consigned 100 cases of medicine to Mr. Rahim of Comilla on 01.01.08 costing Tk.1,000 per

case. The goods are to be sold at 25% above cost. Any deficiency in selling price are to be borne by

Mr. Rahim. Mr. Rahim is, however, entitled to a special commission of 25% of any surplus price realized.

Mr. Rahim is further entitled to an ordinary commission of 5% and del-credere commission of 2.50% on

all sales in addition to special commission. Mr. Karim incurred the following expenses:

21




Q. No. 3 (Contd.)

Tk.

Packing charges 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) Receipt of cash from Sony-Japan Tk.60,000.

(ii) Merchandise received from home office at an invoice price of cost plus 25% costing Tk.1,20,000.

(iii) Purchase of furniture by branch for cash Tk.30,000.

(iv) Sale on credit of Tk.65,000.

(v) Collection from accounts receivable Tk.35,000.

(vi) Expenses incurred by the branch are:

Sales salaries Tk.2,000

Sales commission Tk.2,000

Rent Tk.2,000

Miscellaneous Tk.1,500

(vii) Remittance to home office Tk.20,000.

(viii) Home office charged to branch the following expenses:

Insurance on branch assets Tk.350

Depreciation on branch assets Tk.500

Taxes on branch assets Tk.250

Advertising Tk.3,000

Interest on investment in branch Tk.1,000

(ix) Ending inventory of branch Tk.85,000

Required:

(a) Give Journal entries in the books of Sony-BD and Sony-Japan.

(b) Give adjusting and closing entries both in branch and home office books.

[Marks: (12+8) = 20]

22




Q. No. 5.

The following information was assembled for M/s. ABC Pipeline Company:

Balance Sheet

December 31

2008 2007

Cash (overdraft in 2007) Tk.38,625 (Tk.5,625)

Accounts Receivable 82,000 95,500

Inventories 73,250 50,000

Long-term investments 12,000 27,000

Land, building and Equipment Tk.1,30,000 Tk.95,000

Less: Accumulated Depreciation 21,500 1,08,500 20,000 75,000

Patents --- 35,000

Total assets Tk.3,14,375 Tk.2,76,875

Accounts payable 55,875 49,375

Bonds payable 50,000 20,000

Premium on bonds payable 2,375 ---

Preferred stock, Tk.100 par --- 50,000

Common stock, Tk. 10 par 1,60,000 1,00,000

Premium on common stock 24,000 ---

Retained earnings 22,125 57,500

Total liabilities and stock holders equity Tk.3,14,375 Tk.2,76,875

Account: Retained Earnings

Date Item Debit Credit Balance

2008: Debit (Tk.) Credit (Tk.)

Jan-1 Balance --- --- --- 57,500

Oct-15 Cash dividends Tk.25,000 --- --- 32,500

Dec-12 Premium on retirement of preferred stock 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 Tk.4,375

Extraordinary loss on retirement of bonds 1,000

Net loss 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

********

23



PROFESSIONAL LEVEL- II (NEW)

SUBJECT: 202. MANAGEMENT ACCOUNTING.



Q. No. 1.

(a) 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?

(b) What is the role of Cost Management with respect to the objective of continuous improvement?

(c) Where does the theory of constraints recommend that improvement efforts be focused?

(d) Samir companys projection for the coming year is as follows:

Total (Tk.) Per Unit (Tk.)

Sales 200,000 20

Less Variable expenses 120,000 12

Contribution margin 80,000 8

Less Fixed expenses 64,000

Operating income 16,000

Required:

(i) Compute the break-even point in units.

(ii) How many units must be sold to earn a profit of Tk.30,000?

(iii) Compute the contribution margin ratio. Using the ratio compute the additional profit that Samir

would earn if sales were Tk.25,000 more than expected.

(iv) Suppose Samir would like to earn operating income equal to 20 percent of sales revenue. How

many units must be sold for this goal to be realized? Prepare an income statement to prove your

answer.

[Marks: (4+3+3+10) = 20]

Q. No. 2.

Ovi Manufacturing Co. is interested in comparing net earnings for two periods. The companys operating data are as follows:

Period-1 Period-2

Standard Production (units) 30,000 30,000 Actual Production (units) 30,000 25,000 Sales (units) 25,000 25,000 Sales price per unit Tk.15.00 Tk.15.00 Variable manufacturing costs per unit: Direct materials Tk.1.50 Tk.1.50 Direct labor 2.50 2.50 Variable factory overhead 2.00 2.00 Total Variable Manufacturing costs per unit Tk.6.00 Tk.6.00 Fixed factory overhead (Tk.4 per unit) Tk.120,000.00 Tk.120,000.00 Selling and administrative overhead (fixed) Tk.50,000.00 Tk.60,000.00

Required:

(a) Prepare a statement of earnings for both periods under the: (1) Absorption costing method, (2)

Direct costing method.

(b) Account for the difference in net earnings between the two methods.

(c) Explain why net earnings under the two methods for the two periods are equal combindly.

(d) If the firm used direct costing in its formal accounting records, what adjustments are necessary

for external reporting?

[Marks: (14+2+2+2) = 20]

24




Q. No. 3.

(a) All future costs are relevant in decision-making. Do you agree? Why?

(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

Total direct cost 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

Depreciation of mixing equipment 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) In what way is the flexible budget involved in product costing?

(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.

25




Q. No. 4. (Contd..)

The production process requires direct labor at two skill levels. Workers at the K102 level earn Tk.

50.00 per hour and can process one batch of Dura flex per hour. Each batch consists of 100 units.

The manufacturing of Dura flex also requires one tenth of an hour of K 175 workers time for each unit manufactured. K 175 Workers earn Tk. 20.00 per hour. Manufactured overhead is allocated at the rate of Tk. 200.00 per batch and Tk. 30.00 per direct labor hour.

Required:

On the basis of the preceding data and projections, prepare the following budgets for July, 2010:

(i) Sales budget (in taka)

(ii) Production budget (in units)

(iii) Production budget for August ( in Units)

(iv) Direct materials purchase budget (in pounds)

(v) Direct materials purchase budget (in taka)

(vi) Direct manufacturing labor budget (in taka)

Marks : (3+17) = 20

Q. No. 5.

(a) Distinguish between Absolute profitability and relative profitability.

(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 Tk. 5,000

Direct labor 8,000

Overhead 2,000

Tk. 15,000

Plus 20% 3,000

Sales price Tk. 18,000

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 =

26


CMA DECEMBER 2009 EXAMINAION PROFESSIONAL LEVEL-II (NEW)

SUBJECT : 203. COMMERCIAL & INDUSTRIAL LAWS

Time : Three hours Full Marks :

100

Answer FIVE questions taking at least TWO from each group A and B. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

GROUP A : COMMERCIAL LAW

Q. No. 1.

(a) What is meant by discharge of a contract? What are the modes of discharge of contract?

(b) All contracts are agreements but all agreements are not contracts Discuss. (c) 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) Describe the rules regarding the presentation of a Bill of Exchange with exception.

(b) Discuss the features of negotiable instruments.

(c) 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]

GROUP B : INDUSTRIAL LAW

Q. No. 4.

(a) Classify different types of workers?

(b) What is the procedure for punishment of a worker?

(c) Describe the grievance handling procedures.

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

Q. No. 5.

(a) Describe the requisites for registration of a trade union of workers. (b) What constitutes unfair labour practices by an employer?

[Marks : (10+10) = 20]

Q. No. 6.

State the procedures for settlement of an industrial dispute. [Marks = 20]

==THE END==

27



PROFESSIONAL LEVEL-II (NEW)

SUBJECT: 204. TAXATION.



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) Briefly explain the tax implications in the following cases:

(a) Non-Governmental Organizations (NGO)

(b) Private Educational Institutions

(c) Co-operative Societies

(d) Local authorities

[Marks: {(4x3)+(42)} = 20]

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) Tk. 15,000 donated to a non-recognized school.

(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]

28


PROFESSIONAL LEVEL-II (NEW)

SUBJECT: 204. TAXATION.

Q. No. 3.

M/s. ABCD is a partnership firm with four partners having equal shares. The business that the firm

performed during the financial year was:

(i) Dealings in grocery goods;

(ii) Contract business;

(iii) Worked as broker of sale & purchase of land;

(iv) Buying house commission.

During the year the sale of grocery goods was Tk.5,00,00,000.

Other information were

Opening stock Tk.35,00,000, purchase Tk.4,50,00,000; closing stock Tk.1,50,00,000.

Rent Tk.2,40,000; salary & other expenses Tk.25,50,000.

Receipts from contract works Tk.4,25,00,000, tax deducted as sources Tk.17,00,000.

Receipts from brokery Tk.26,30,000. Direct expenses Tk.15,10,000.

Buying house commission Tk.2,25,00,000. Tax deducted at source Tk.9,00,000.

The firm had Bank OD to the tune of Tk.5,00,00,000. Interest on OD was Tk.72,00,000.

The interest to be apportioned among the business listed above in the following ratio 3:3:2:2.

Capital introduced in the business by the partners @Tk.5,00,000 each. Mr. B&C got the rent as they are

the proprietor of the shop.

From the above information compute income under different heads and also the total income and

taxes payable by the firm.

[Marks: 20]

Q. No. 4.

(a) What consequences an importer shall face if he fails to submit mandatory PSI certificate?

(b) What is the use of Bond License? For what purpose it is issued?

(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) What is deemed Export? What conditions are to be fulfilled by a deemed exporter?

[Marks: (5x4) = 20]

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 =

29


CMA DECEMBER 2009 EXAMINATION PROFESSIONAL LEVEL-III (New)

SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING II.

Time : Three hours Full Marks: 100


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.) Branch (Tk.)

Inventories as on 1 January 2008 100,000 45,000

Purchases 1150,000 --

Sales 2050,000 1550,000

Other Expenses 152,000 62,000

Inventories as on 31 December 2008 52,000 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 Date of Deposit by Branch Date of Receipt by Home Office

50,000 25 December 2008 31 December 2008

20,000 28 December 2008 2 January 2009

40,000 31 December 2008 3 January 2009

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 Credit

Plant and Equipment 1000,000

Accumulated Depreciation 140,000

Long-term note receivable 200,000

Accounts Receivable 100,000

Prepayments, advances and deposits 90,000

Inventories at cost 120,000

30

Cash and cash equivalents 360,000

31


SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING II

Q. No. 2. (Contd..)

Capital Stock 350,000

Share money deposit 250,000

Retained earnings as on 1 January 2008 180,000

10% Bonds payable 500,000

Sales 2000,000

Cost of goods sold 1200,000

Selling and distribution expenses 100,000

Administrative expenses 140,000

Depreciation expense 100,000

Accounts payable 110,000

Other income 30,000

Interest expenses 50,000

Income tax expense 100,000

3560,000 3560,000

Other relevant following information are also available:

i) Greener BD Private Ltd. uses an average cost of goods sold. Inventory increased by

Tk.20,000 during the year. Purchases were made uniformly during 2008.

ii) Plant and Equipment were acquired as follows:

Date Cost

1 January 2007 400,000

1 January 2008 600,000

iii) Plant and Equipment are depreciated using the straight-line method, on 10 year life

and no residual value.

iv) The 5-year bonds were issued on 1 October 2007. The premium is amortized on a

straight-line method. The interest is paid on 1 April and 1 October.

v) The long-term note receivable represents a 10 percent loan to a supplier made in

December 2007 and due in 2011.

vi) All income and expense items except interest expense and income tax expense

occurred evenly through out the year.

vii) Exchange rates were as follows:

1 January 2007 A $ 1 = BDT 40

1 October 2007 A $ 1 = BDT 41

1 January 2008 A $ 1 = BDT 42

1 April 2008 A $ 1 = BDT 44

1 October 2008 A $ 1 = BDT 48

31 December 2008 A $ 1 = BDT 50

Average 2008 A $ 1 = BDT 46

viii) Share money deposit was received 1 January 2008.

Required: 1. Prepare a schedule translating the 31 December 2008 trial balance of Greener

BD Private Ltd. from BDT to Australian Dollars.

2. Prepare Income Statement and Balance Sheet of Greener BD Private Ltd. in

Australian Dollars.

[Marks: {5 +(10+10)} = 25]

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.) 20.00

Deferred tax assets (Dr.) 10.00

The following transactions were reported during 2003 2004:

(i) Tax rate 40%

(ii) Depreciation as per Book 50.00

Depreciation for tax purpose 30.00

There were no additions to fixed assets during the year.

32

(iii) Items disallowed in 2002 2003 and allowed for tax purposes in 2003 2004 10.00

33


SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING II

Q. No. 3. (Contd..)

(iv) Interest to financial institutions to be accounted in the books on accrual basis,

but actual payment was made on 30.09.2004 20.00

(v) Donations to private trusts made in 2003 2004 10.00

(vi) Share issue expenses allowed for the year 2003 2004 (10% of Tk. 50.00 lacs incurred in 1999 2000) 5.00

(vii) Repairs to plant and machinery Tk. 100.00 lacs was spread over the period 2003 2004 and 2004 05 equally in the books. However, the entire expenditure was allowed for income tax purposes.

Required: Indicate clearly the impact of above items in terms of deferred tax liability/deferred tax

assets and the balances of deferred tax liability /deferred tax asset on 30.06.2004.

[Marks: 25]

Q. No. 4.

(a) What is negative good will? Is a negative purchase discrepancy the same as negative goodwill?

Explain.

(b) The Balance Sheet of Eastern Co. Ltd. disclosed the following position on 31 December 2008:

Assets Taka

Plant and Machinery 400,000

Land and Building 350,000

Inventories 200,000

Accounts Receivable 150,000

Cash and Bank balances 50,000

1150,000

Liabilities and Share Capital:

Common Stock (10 par value) 100,000

Preferred Stock (10 par value) 100,000

Retained Earnings 10,000

Net Profit during the year 40,000

7% Bond payable 500,000

Accounts payable 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 Turnover Profit/(Losses)

2002 1100,000 140,000

2003 1200,000 110,000

2004 900,000 (120,000)

2005 600,000 40,000

2006 1200,000 100,000

2007 1400,000 150,000

2008 1750,000 170,000

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==

34



PROFESSIONAL LEVEL- III (NEW)

SUBJECT: 302. ADVANCED COST ACCOUNTING.



Q. No. 1.

(a) Is a standard cost system equally applicable to Job Order Costing and Process Costing ?

(b) The standard cost card for Torno Companys product is:

Amount (Tk.)

Materials 7 liters @ Tk.

0.50. 3.50

Labor hour @ Tk.

6.00... 3.00

Variable Factory Overhead hour @ Tk.

2.00 1.00

Fixed Factory Overhead hour @ Tk.

4.00.. 2.00

Standard production cost per unit 9.50

Data for November:

(a) 1,000 units (40% converted) were in process at the beginning of the month.

5,050 units were started during the month.

5,000 units were transferred to finished goods.

800 units (25% converted) were in process at the end of the month.

(b) Materials are all added at the beginning of the process. Conversion costs are incurred

evenly throughout the process. Inspection takes place when the units are 80%

converted. Under normal conditions, no spoilage should occur.

(c) 40,000 liters of materials were purchased for Tk.19,200 and were charged to inventory at

standard cost.

(d) 37,000 liters of materials were issued to production.

(e) Direct labor payroll was Tk.15,600 for 2400 hours.

(f) Actual factory overhead costs were:

Amount

(Tk.)

Amount

(Tk.)

Indirect labor (variable) .. 4,000 Supervision... 4,000 Depreciation (based on

time) 2,500

Supplies. 1,000 Heat, light, and power (variable). 300

(Fixed). 1,200 1,500

Property tax. 200 Insurance.. 500 Total .. 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]

35




Q. No. 2.

(a) Distinguish between join product and by product. In making decision about the further

processing of joint products, what costs are relevant?

(b) Doxy Company manufactures three products from a common input in a joint processing

operation. Joint processing costs up to the split-off point total Tk.350,000 per quarter. The

company allocates these costs to the joint products on the basis of their total sales value at the

split-off point. Unit selling prices and total output at the split-off point are as follows:

Product Selling Price Quarterly Output

A Tk.16 per pound 15,000 pounds

B 8 per pound 20,000 pounds

C 25 per gallon 4,000 gallon

Each product can be processed further after the split-off point. Additional processing requires no

special facilities. The additional processing costs (per quarter) and unit selling price after further

processing are given below:

Product Additional

Processing costs

Selling price

A Tk.63,000 Tk.20 per pound

B 80,000 13 per pound

C 36,000 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 New Small Car (Tk.) Old Big Car (Tk.)

Purchase price 70,000 40,000

Sale price after 10 years 30,000 20,000

Servicing and other fixed expenses per annum 1,500 2,400

Tax and Insurance per annum 3,500 1,000

Km. run per liter 10 7

Petrol price per litre is Tk.7. His estimated annual requirement of travel is 10,000 km. You are

required to find out:

(a) Which of three options will be most economical for him;

(b) In case of his annual travel requirement is 20,000 km. what should be his decision?

(c) At how many Kms. p.a. the cost of the two cars will break-even?

(b) The XYZ Company sells three products. The following is an analysis of profitability of each of the

products:

Per unit basis

A (Rs.) B (Rs.) C (Rs.)

Selling price 25.00 40.00 55.00

Variable costs 9.00 19.00 32.00

Fixed costs 15.00 15.00 15.00

Total costs 24.00 34.00 47.00

Profit 1.00 6.00 8.00

Profit % to selling price 4.00% 15.00% 14.50%

Annual volume (in units) 11,000 7,500 6,500

36




Q. No. 3. (Contd..)

The company has total fixed costs of Tk.3,75,000 per year. The fixed cost per unit has been arrived

at by dividing the total fixed cost with the total volume of 25,000 units. On the basis of the above

analysis, it has been suggested by the Cost Accountant that product A should be discontinued if

a substitute could be found that would be more profitable. This conclusion upsets the sales

manager, who had planned to undertake a Tk.60,000 promotional campaign for product A. He

has estimated that a Tk.50,000 expenditure would increase the volume of the product selected

by 30%; sales of other products would be unaffected as would existing fixed costs.

Required: To determine whether promotional campaign should be undertaken or not. If your answer is

yes, then which product should be selected for special promotion? Will your decision get

changed if the required expenditure on promotional campaign were Tk.50,000 only?

[Marks: (10+15)} = 25]

Q. No. 4.

(a) 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 Tk.1,50,000

Wages Tk.1,30,000

Overhead expense Tk.1,45,000

Total 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]

37




Q. No. 5.

The Rochester Company assembles a washing machine that is sold to three classes of customers:

department stores, retail appliance stores, and wholesalers. The data with respect to these three

classes of customers are shown below:

Customer Class 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

Retail appliance stores 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

Actual marketing costs for the year are:

Function Costs (Tk) Measure of Activity

Selling. 65,000 Salespersons calls

Packing and shipping.. 12,000 Customers orders

Advertising 10,000 Taka sales

Credit and collection 15,000 Invoice lines

General accounting.. 18,000 Customers orders

Required: An income statement by customer classes with functional distribution of marketing

expenses. (When allocating the advertising expense, round to the nearest Tk.100).

[Marks: 15]

= THE END =

38




SUBJECT: 303. CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES.


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) What is a prospectus? When should a statemen

ICMA Questions Dec 2009

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Transcript of ICMA Questions Dec 2009