KPK PMS Accountancy And Auditing Paper II – 2008

KPK PMS Accountancy And Auditing Paper II – 2008

Note: Read the following instructions carefully.

  1. Attempt any Five questions
  2. All questions carry equal marks
  3. Extra attempt of any question or any part will not be considered
  4. 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:

  1. 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.
  2. 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
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