KPK PMS Accountancy And Auditing Paper II – 2008
Note: Read the following instructions carefully.
- Attempt any Five questions
- All questions carry equal marks
- Extra attempt of any question or any part will not be considered
- Candidates must draw two straight lines at the end to separate each question in answer book.
Question 1: Forge Machine Works collects its cost data by the job order cost accumulation procedure. For job 642, the following data are available:
TABLE
Factory overhead is applied at the rate of Rs.3.50 per direct labour hour.
Required:
- The appropriate information entered on job order cost sheet.
- The sale price of the job, assuming that it was contracted with a markup of 40% of cost.
Question 2: The Tracy Company manufactures joint product X and Y as well as by-product. Cumulative cost data for the period show Rs.2,04.000 representing Rs.20,000 completed units processed through the Refining Department at an average cost of Rs.10.20. Costs are assigned to X and Y by market value method which considers further processing costs in subsequent operations. To determine the cost allocation to Z, the market value (reversal cost) method is used. Additional data:
TABLE
Required:
Cumulative cost allocated to Z, X, and Y.
Question 3: Answer the following questions.
- Define Auditing and explain how it is different from investigation?
- Write a detailed note on duties and rights of auditor.
Question 4: Write detailed notes on any Two of the following Heads of income:
- Salary
- Income from property
- Income from business or profession
- Capital gains
Question 5: Mr Ghalib is employed in a scale of Rs.13,000 – 1,000 – 17,00. His basic salary is Rs.15,000 per month. Other benefits provided to him by his employer during the year ended 30th June 2007, are given below:
- Dearness Allowance 18,000 per annum
- Entertainment Allowance 26,000 per annum
- Conveyance Allowance 24,000 per annum
Notes:
- Mr Ghalib has been provided a rent-free furnished accommodation by his employer. Mr Ghalib was entitled a accommodation allowance of Rs.60,000 if accommodation was not provided to him.
- Salary of sweeper who works in Mr Ghalib accommodation is Rs.12,000 per annum. This salary is also paid by his employer.
Required:
Calculate Taxable Income of Mr Ghalib
Question 6: Write a detailed note on advantages and disadvantages of short term financing. Also critically evaluate its role in the economic development of Pakistan.
Question 7: Write detailed note on the following categories of ratios
- Liquidity Ratios
- Profitability Ratios