Accountancy and Auditing-2017
Accountancy and Auditing-2017
Accountancy and Auditing-2017
Roll Number
COMPETITIVE EXAMINATION – 2017
FOR RECRUITMENT TO POSTS IN BS-17
UNDER THE FEDERAL GOVERNMENT
ACCOUNTANCY AND AUDITING, PAPER-I
Additional information:
a. An insurance policy examination showed $1,240 of expired insurance.
b. An inventory count showed $210 of unused shop supplies still available.
c. Depreciation expense on shop equipment, $350.
d. Depreciation expense on the building, $2,220.
e. A beautician is behind on space rental payments, and this $200 of accrued
revenues was unrecorded at the time the trial balance was prepared.
f. $800 of the Unearned Rent account balance was earned by year-end.
g. The one employee, a receptionist, works a five-day workweek at $50 per day. The
employee was paid last week but has worked four days this week for which she has not
been paid.
h. Three months' property taxes, total $450, have accrued. This additional amount of
property taxes expense has not been recorded.
i. One month's interest on the note payable, $600, has accrued but is unrecorded.
Required: Based on the above information, prepare the adjusting journal entries for Bella's
Beauty Salon and adjusted trial balance for Bella's Beauty Salon.
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ACCOUNTANCY AND AUDITING, PAPER-I
SECTION-II
Q. 5. The marketing department of Graber Corporation has submitted the following sales forecast for the (20)
upcoming fiscal year.
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Budgeted unit sales . 16,000 15,000 14,000 15,000
The selling price of the company’s product is $22.00 per unit. Management expects to collect 75% of sales in
the quarter in which the sales are made, 20% in the following quarter, and 5% of sales are expected to be
uncollectible. The beginning balance of accounts receivable, all of which is expected to be collected in the first
quarter, is $66,000. The company expects to start the first quarter with 3,200 units in finished goods inventory.
Management desires an ending finished goods inventory in each quarter equal to 20% of the next quarter’s
budgeted sales. The desired ending finished goods inventory for the fourth quarter is 3,400 units.
Required: 1. Prepare the company’s sales budget and schedule of expected cash collections.
2. Prepare the company’s production budget for the upcoming fiscal year.
Q. 6. Valenko Company provided the following account balances for the year ended December 31 (20)
(all raw materials are used in production as direct materials):
Selling expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $215,000
Purchases of raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . $260,000
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ?
Administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160,000
Manufacturing overhead applied to work in process . . . . . .. . . $340,000
Total actual manufacturing overhead costs . . . . . . . . . . . . . . . $350,000
Inventory balances at the beginning and end of the year were as follows:
Beginning of Year End of Year
Raw materials .. . . . $50,000 $40,000
Work in process . . .. . . ? $33,000
Finished goods . . . .. . $30,000 ?
The total manufacturing costs for the year were $675,000; the cost of goods available for sale total $720,000;
the unadjusted cost of goods sold total $665,000; and the net operating income was $35,000. The company’s
over-applied or under-applied overhead is closed entirely to cost of goods sold.
Required: Prepare schedules of cost of goods manufactured and cost of goods sold and an income statement.
(Hint: Prepare the income statement and schedule of cost of goods sold first followed by the schedule of cost
of goods manufactured.)
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ACCOUNTANCY AND AUDITING, PAPER-I
Q. 7. Linden Company manufactures and sells a single product. Cost data for the product as follows: (20)
Variable costs per unit:
Direct materials $6
Direct labor 12
Variable factory overhead 4
Variable selling and administrative 3
Total variable costs per unit $25
Fixed costs per month:
Fixed manufacturing overhead $240,000
Fixed selling and administrative 180,000
Total fixed cost per month $420,000
The product sells for $40 per unit. Production and sales data for May and June, the first two
months of operations, are as follows:
Units Units
Produced Sold
May 30,000 26,000
June 30,000 34,000
Income statements prepared by the accounting department, using absorption costing, are
presented below:
May June
Sales $1,040,000 $1,360,000
Cost of goods sold 780,000 1,020,000
Gross margin 260,000 340,000
Selling and administrative expenses 258,000 282,000
Net operating income $ 2,000 $ 58,000
Required:
1. Determine the unit product cost under:
a. Absorption costing.
b. Variable costing.
2. Prepare contribution format variable costing income statements for May and June.
3. Reconcile the variable costing and absorption costing net operating incomes.
Q. 8. The PVC Company manufactures a high-quality plastic pipe that goes through three processing (20)
stages prior to completion. Information on work in the first department, Cooking, is given
below for May: Production data:
Pounds in process, May 1: materials 100%
complete; conversion 90% complete 70,000
Pounds started into production during May 350,000
Pounds completed and transferred to the next department. ?
Pounds in process, May 31: materials 75% complete;
conversion 25% complete 40,000
Cost data:
Work in process inventory, May 1:
Materials cost $86,000
Conversion cost $36,000
Cost added during May:
Materials cost $447,000
Conversion cost $198,000
The company uses the weighted-average method.
Required:
1. Compute the equivalent units of production.
2. Compute the costs per equivalent unit for the month.
3. Determine the cost of ending work in process inventory and of the units transferred out to
the next department.
4. Prepare a cost reconciliation report for the month.
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FEDERAL PUBLIC SERVICE COMMISSION
Roll Number
COMPETITIVE EXAMINATION – 2017
FOR RECRUITMENT TO POSTS IN BS-17
UNDER THE FEDERAL GOVERNMENT
ACCOUNTANCY AND AUDITING, PAPER-II
Q. No. 2. What system of Internal check would you recommend for a large manufacturing (20)
company to prevent fraud in connection with the purchase of raw material on credit
basis?
Q. No. 3. A fraud has been committed in a business. Being a Manager of Accounts you are asked (20)
by the authorities to take up investigative measures and steps to extract the fraudulent
matter. Discuss the measures and steps you will take in this regard.
Q. No. 4. What is meant by Auditor's Report? Describe the key characteristics of a good audit (20)
report, along with the significance of Auditor's report to show the transparent picture of
the company.
SECTION-B (BUSINESS TAXATION)
Q. No. 5. (A) Define the concept of sales tax & describe the sales tax act of 1990. (20)
Identify the official positions of Inland revenue officers and their powers.
(B) Mr. Sartaj is registered under the Sales Tax Act, 1990 as a manufacturer as
well as a commercial importer. He has provided you the following information
for the month of February, 2016:
Rs. in Million
Export sales – manufactured goods 35
Local sales of exempt manufactured goods 25
Taxable supplies – manufactured goods 130
Taxable supplies – commercial imports 70
Purchases
Local purchases of raw material from:
Registered person 180
Unregistered persons 60
Commercial imports 50
All the above amounts are exclusive of sales tax. Commercial imports have
been stated at C&F value and are subjected to customs duty at the rate of 10%.
There was no stock of commercial imports at the beginning or end of the
month.
Required:
Compute the sales tax liability of Mr. Sartaj along with input tax to be carried
forward (if any) in his sales tax return for the month of February 2016. (Ignore
the effect of minimum value addition in case of commercial imports)
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ACCOUNTANCY AND AUDITING, PAPER-II
Q. No. 6. (A) Identify the main features of Income Tax ordinance 2001. Also discuss the (20)
exemptions and tax concessions available to a taxpayer under that ordinance.
(B) Mr. Ahmed is an employee of a company. He has submitted the following
information for the tax year 2016.
Rs.
Basic Salary per annum 340,000
Bonus 56,000
Cost of living allowance 66,000
Dearness allowance 32,000
Rent free unfurnished accommodation – annual value 162,000
Company maintained car for personal and official use, cost of vehicle is. 980,000
Utility allowance 58,000
Leave encashment 31,600
Leave Fare Assistance provided every year 22,600
Hotel bills paid by the company relating to a pleasure trip 28,400
Employee’s contribution towards provident fund 30,000
Zakat paid under Zakat and Ushr Ordinance 15,000
Tax deducted by the company for salary 35,000
Required: Compute the total income, taxable income and tax liability of Mr. Ahmed.
Q. No. 8. (A) Describe the economic systems, also Identify which system is more (20)
beneficial for the economic development of the country.
(B) XYZ company presently pays a dividend of $ 1.50 per share on its common
stock. The company expects to increase the dividend at a 20% annual rate the
first four years and at the rate of 13% at the next four years then the growth on
the dividend at a 7% thereafter. This phased growth patterns is in keeping with
the expected life cycle of earnings. You are required a 16% return to invest in
this stock. What value should you place on a share of this Stock?
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