CMA Question August-2013

8/12/2019 CMA Question August-2013

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESHCMA AUGUST 2013, EXAMINATION

FOUNDATION LEVELSUBJECT: 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.CAMPS MUSIC STORE

Trial BalanceJuly 31, 2012

Debits Credits Cash ... Tk. 34,780

Accounts Receivable .. 4,600 Merchandise Inventory, 8/1/2011 31,400

Prepaid Fire Insurance . 720Prepaid Rent .. 4,800Office Equipment ... 12,000

Accumulated Depreciation Office Equipment Tk. 4,500 Accounts Payable 8,000Clay Camp, Capital ... 22,000Clay Camp, Drawing . 20,000Sales 300,000Sales Returns and Allowances . 1,000Purchases 194,000Purchase Returns and Allowances 1,400Transportation In 5,200

Advertising Expense ... 1,000Supplies Expense 1,800Salaries Expense . 23,200Utilities Expense .. 1,400

Tk. 335,900 Tk. 335,900Clay Camp has prepared the above trial balance for Camps Music Store. The followinginformation will be used to prepare the work sheet.1. A 12-month fire insurance policy was purchased for Tk.720 on April 1, 2012, the date on

which insurance coverage began.2. On February 1, 2012, Camp paid Tk. 4,800 for the next 12 months rent. The payment was

recorded in the Prepaid Rent account.3. Depreciation expense on the office equipment is Tk. 1,500.4. Merchandise inventory at July 31, 2012, was Tk. 26,400.Required:a. Prepare a 10-column work sheet for Camps Music Store for the fiscal year ended July 31,

2012.b. Prepare a classified income statement for the fiscal year ended July 31, 2012. Do not

separate operating expenses into selling and administrative categories.c. Prepare a statement of owners equity for the fiscal year ended July 31, 2012.d. Prepare a classified balance sheet for July 31, 2012.e. Prepare closing entries.

[Marks: (8+7+2+4+4) = 25]


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CMA AUGUST 2013, EXAMINATIONFOUNDATION LEVELSUBJECT: 001. PRINCIPLES OF ACCOUNTING.

Q. No. 2.(a) Write a note on impress system of accounting.

(b) The following information is available to reconcile XYZ Companys book balance of cashwith its bank balance as of July 31, 2011.(i) The July 31 cash balance according to accounting records is Tk. 80,756.60 and the bank

statement balance on that date is Tk. 93,644.80.(ii) An examination of deposit slips revealed that daily cash receipts of Tk. 19,166.20 were

placed in the banks evening depository on July 31, which do not appear on the July 31bank statement.

(iii) When the July Cheques are compared, it is found that Cheque No. 1437 had beencorrectly drawn for Tk. 6,918 to pay for office supplier but was erroneously in theaccounting records as Tk. 6,981.

(iv) Cheque No. 1244 for Tk. 9,178.60 and Cheque No. 1284 for Tk. 800.00 both written andentered in the cash book in July, are not among the cancelled Cheques. Two Cheques,

No. 1211 for Tk. 4,578 and No. 1223 for Tk. 820.80, were outstanding on the most recentJune 30 reconciliation. While Cheque No. 1211 is included in the July cancelled chequelist, but Cheque No. 1223 is not listed.

(v) Two debit memoranda are enclosed with the statement and are unrecorded at the time ofreconciliation. One of it is for Tk. 1,525 and debit with an NSF cheque for Tk. 1,490 thathad been received from a customer, BM Company. The bank assessed a Tk. 35 fee forprocessing it. The second debit memorandum is a Tk. 198 charge for cheque printing.

(vi) A credit memorandum indicates that the bank collected Tk. 38,000 on a note receivablefor the company, deducted a Tk. 40 collection fee, and credited the balance to thecompany account.

(vii) A two-month, 7% Tk. 15,000 customers note dated May 28, discounted on July 15, hadbeen retested on July 28, and the bank had charged the company for Tk. 15,045 whichincluded a pretest fee of Tk. 45.

Required:(i) Prepare Bank Reconciliation Statement as of July 31, 2011 bringing both balances to the

correct position.(ii) Prepare the necessary journal entries to adjust the cash.

[Marks: {5+ (15+5)} = 25]Q. No. 3.(a) The Best Company estimates its bad debts expense to be 1% of sales. Sales in 2012 were

Tk. 750,000.

Required: Prepare the journal entries for the following transactions:

1. The company prepared the adjusting entry for bad debts for the year 2012.2. On January 15, 2013, the company decided that the account for James Ryan in the

amount of Tk. 500 was uncollectible.3. On February 12, 2013, James Ryans check for Tk. 500 arrived.

(b) A Tk. 15,000, 90-day, 12% note dated June 15, 2012, was received by the Long Companyfrom the Short Company in payment of its account.Required: Prepare the journal entries in the records of the Long Company for each of thefollowing:1. The Long Company received the note on June 15, 2012.2. The Long Company discounted the note on July 15, 2012, at 10% at the Citizens

National Bank.


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CMA AUGUST 2013, EXAMINATIONFOUNDATION LEVELSUBJECT: 001. PRINCIPLES OF ACCOUNTING.

Q. No. 3. (contd..)

3. The Short Company paid the note at maturity.4. Assume that the Short Company did not pay the note at maturity. The Citizens National

Bank charged the note to the Long Company. The Long Company decided that the notewas uncollectible.

(c) The Meaders Company reported annual net income as follows:2010 . Tk. 68,0002011 . 71,0002012 . 60,000

Analysis of the inventories shows that certain clerical errors were made with the followingresults:

Incorrect CorrectInventory Inventory Amount Amount

December 31, 2010 Tk. 12,000 Tk. 14,200December 31, 2011 14,000 11,700Required: What is the corrected net income for 2010, 2011, and 2012?(d) Allowance for doubtful debts is an application of conservatism Critically evaluate the

statement.[Marks: (5+10+5+5) = 25]

Q. No. 4.(a) On January 1, 2006, a company purchased a machinery at an acquisition cost of Tk.

84,000. The machinery has been depreciated by the straight line method using a 4 yearservice life and a Tk. 12,000 salvage value. The companys fiscal year ends on December31.

Required:Prepare the journal entries to record the disposal of the machinery that it was:(i) Retired and scrapped with no salvage value on January 1, 2010.(ii) Sold for Tk. 15,000 on July 1, 2009.(iii) Traded in on a new machinery on January 1, 2009. The fair market value of the old

machinery was Tk. 34,000 and Tk. 6,000 was paid in cash.(b) A Ltd. Company depreciates its machinery at 10% on diminishing balance method, had on

1 st January 2010 Tk. 175,000 to the debit of machinery account. A part of machinerypurchased on 1 st January, 2008 for Tk. 30,000 was sold for Tk. 15,000 on July 01, 2010. Anew machinery at of cost of Tk. 35,000 was purchased and installed on the same dateinstallation charge being Tk. 2,500. The company wanted to change its method ofdepreciation from diminishing balance method to straight line method with effect from 1 st

January, 2010. The rate of depreciation is remained the same.Required:(i) Pass Journal entries to record the sale of the machinery.(ii) Calculate the depreciation expense of the existing machinery to be recorded in the

books for 2010.[Marks: (15+10) = 25]

= THE END =


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FOUNDATION LEVELSUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT.

Time: Three Hours Full Marks:100 Answer 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. Start answering each question from a fresh sheet.

GROUP - A : BUSINESS COMMUNICATION

Q . No. 1.(a) What is Non verbal communication?(b) List and discuss four objectives of graphic and visual aids.(c) What is meant by Electronic Communication?(d) What are the functions of a CPU?

[Marks: (3+4+4+4) = 15]

Q. No. 2.(a) Give a brief thought on how language can he used more effectively in Business

Communication.(b) Write an application to the HRM (Human Resources Management) of Eastern Bank

Limited for internship program.[Marks: (10+5) = 15]

Q. No. 3.(a) What is a Short Report? Describe different kinds of Short Report.(b) How does the annual report of a listed company help the major users of such report? Give

examples of two such major users.(c) As a Company Secretary, draft a report to the Companys management suggesting ways

for settling of a labor unrest.[Marks: (7+3+5) = 15]

Q. No.4.Write short notes on any FIVE of the following:(a) Credit Report(b) Electronic Communication

(c) Trading Corporation Bangladesh (TCB)(d) Letter of Credit(e) Book Building Method (BBM)(f) ADB(g) BOI(h) European Union.

[Marks: (4 x 5) = 20]


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CMA AUGUST 2013, EXAMINATIONFOUNDATION LEVELSUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT.

GROUP - B : OFFICE MANAGEMENT

Q. No. 5.(a) Briefly write about Goal Congruence & MBO (Management By Objective).(b) Briefly discuss about the important role of HRM (Human Resources Management).(c) Briefly write about KPI Knowing Performance Indicator.

[Marks: (5+6+4) = 15]Q. No. 6.(a) What is work measurement?(b) Explain the different methods of job evaluation.(c) What is management training & why is it important?

[Marks: (3+4+8) = 15]Q. No. 7.(a) What is office form? Discuss the different types of office forms.(b) Discuss the principles of a good Filing System(c) Why is an index prepared? Explain in brief the various methods of indexing of files.

[Marks: (5+4+6) = 15]Q. No. 8.Write short notes on any FIVE of the following:(a) Source of File(b) Record Management(c) Office environment(d) Card index(e) Functional organization(f) Office Layout(g) Employer employee relationship(h) Standing committee

[Marks: (4 x 5) =20]

= THE END =


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FOUNDATION LEVELSUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS.


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

GROUP - A : BUSINESS ECONOMICSQ. No. 1.(a) Describe the importance of Time Element in Price Determination.(b) State the similarities and dissimilarities between Monopoly competition and Perfect

competition.(c) State the areas where Demand and Supply analysis can be applied under perfect

competition.

[Marks: (6+6+8) = 20]Q. No. 2.(a) Differentiate between demand-pull and cost-push inflation. Is inflation always bad? Justify

your views.(b) What are the causes of and remedies for inflation in the present situation of Bangladesh?(c) Explain the impact of interest rate on investment.(d) What are the relative advantages and disadvantages of foreign aid for development of

Bangladesh, particularly financing Padma-Bridge Construction?[Marks: (5+4+4+7) = 20]

Q. No. 3.(a) Differentiate between demand-pull and cost push inflation.(b) How to manage inflation without affecting economic growth?

(c) Explain the term Super Profits. [Marks: (7+7+6) = 20]Q. No. 4.(a) Explain how Monetary Measures and Fiscal Measures help to Control Inflation.(b) Discuss with example:

(i) Fixed cost and Variable cost.(ii) Direct cost and Indirect cost.(iii) Opportunity cost and Outlay cost.

(c) The table below is presented with the data of information regarding a nations income. Youare required to ascertain (i) Net National Product at Market Prices, (ii) DisposablePersonal Income

Data Value in billion Taka

Net Domestic Product at Factor Price 12,860Government Income from State Owned Enterprise (SOEs) 10Interest on National Debt 110Transfer Payments by Government 280Net Foreign Donations 260Net earned income from export 162Indirect Taxes 1660Direct Taxes 470Subsidies 110Taxes on Corporate profits 345


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[Marks: (7+6+7) = 20]CMA AUGUST 2013, EXAMINATIONFOUNDATION LEVELSUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS.

Q. No. 5.

(a) Distinguish between:(i) Direct Cost and Indirect Cost.(ii) Marginal Cost and Average Cost.(iii) Average Revenue and Marginal Revenue.(iv) Fixed Cost and Variable Cost.

(b) Calculate average cost, marginal cost, marginal revenue and profit from the following data:Units ofoutput

Total Cost(Tk.)

Variable Cost(Tk.)

Fixed Cost(Tk.)

Total Revenue(Tk.)

1 350 150 200 300 2 400 200 200 600 3 450 250 200 900 4 550 350 200 1100

5 600 400 200 1300 6 650 450 200 1500 7 700 500 200 1750 8 800 600 200 2000

[Marks: (8+12) = 20]

GROUP - B : INTERNATIONAL BUSINESSQ. No. 6.(a) Discuss different types of global competitive strategies with example?(b)

(c) Describe export development strategies for both thrust and special sector products export

from Bangladesh.

Suggest your strategies to make Bangladesh Garments product competitive in theinternational market.

[Marks: (7+6+7) = 20]Q. No. 7.(a) What do you mean by the back to back letter of credit?(b) What is the mode of Export financing in Bangladesh?(c) State the role of Multinational Corporation (MNC) in international business of a country.(d) What is the importance of international business for a country?

[Marks: (5+5+5+5) = 20]Q. No. 8.Write Short notes on any five from the following:(i) Trade and Investment Cooperation Framework Agreement (TICFA);(ii) Anti-Globalization;

(iii) International Product Life cycle;(iv) Foreign Direct Investment (FDI);(v) Rules of Origin;(vi) M.D.G.;(vii) Free Trade Area (FTA).

[Marks: (4x5) = 20]

= THE END =


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CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-ISUBJECT: 101. INTERMEDIATE FINANCIAL ACCOUNTING.

Q. No. 2.XYZ Company reported following ledger balances at December 31, 2012.

Tk. Debit Tk. Credit Cost of goods sold 252,500 Accounts payable 4,300 Land 400,000 Revenue 693,500 Building 225,000 Allowance for doubtful accounts 500 Office Equipment 125,000 8% Bonds payable 25,000 Long term Investments 56,000 Share capital (Tk. 10 par) 350,000 Distribution costs 36,000 Share premium 72,950

Administrative expenses 56,000 Retained earnings 60,300 Short term investments 45,000 Accumulated depreciation Equipment 24,000

Accounts receivable 20,800 General reserve 28,200 Inventories 12,350 Investment income 16,700 Patent 9,000 Sinking fund 21,000 Losses from asset abandonment 3,800 Losses from earthquake 25,000 Loss on disposal of adiscontinued division 30,000 Additional Information:(a) Net realizable value of companys inventory at the year end is Tk. 11,700.(b) A full year interest on bonds payable is due and applicable income tax rate for the

company is 40%.(c) Allowance for bad debt has to charge @ 6% on the ending balance of account receivable.

But in previous years the rate was estimated and applied as 5%. If the new rate had beenused in prior years, cumulated bad debt expense would have been Tk. 7,250 instead ofTk. 6,425.

(d) Patent (to sell and distribute a special product) was acquire on 1 July 2011 with an usefullife of 5 years. The annual impairment review has indicated that the paten has arecoverable value at the end of current year Tk. 6,000.

(e) Depreciation on equipment has to be charged @ 20% under reducing balance method.But in previous years depreciation was charged following straight line method whichresulted Tk. 12,000 depreciation per year. Under the new method, depreciation expensewould be Tk. 22,800 for 2010 and Tk. 20,440 for 2011.

(f) The company identified at the year end some unrealized holding gain on available for salesecurities (included in short term investment) of Tk. 12,800.

(g) A transfer of Tk. 20,000 for the year should be made to general reserve.(h) Bonds payable will be due in June 2013 for which XYZ has been accumulated the sinking

fund. A sum of Tk. 3,000 should be transferred to sinking fund at the end of the year fromgeneral reserve.

Required:(i) A statement of financial position as at December 31, 2012.(ii) A statement of comprehensive income for the year ended December 31, 2012 and(iii) A statement of changes in equity.

[Marks: (8+7+5) = 20]Q. No. 3.(a) State the amount of revenue and/or expense for 1984 in each of the following transactions

of the Marine Co. The accounting period ends December 31, 1984. Treat each itemindividually.(i) On December 15, 1984, Marine received Tk. 12,000 as rental revenue for a 6-month

period ending June 15, 1985.


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(iv) The bonds payable mature in seven months. A sinking fund has been accumulated torepay the full maturity of this bond issue.

CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-ISUBJECT: 101. INTERMEDIATE FINANCIAL ACCOUNTING.Q. No. 4. (contd.)Required:(a) Using this information, prepare the current liabilities and long-term liabilities sections of a

classified balance sheet at December 31, 2007.(b) Explain briefly how the information in each of the four numbered paragraph affected your

presentation of the companys liabilities.[Marks: (15+5) = 20]

Q. No. 5.(a) Revolving Chair (RC) is one of the most popular items of Home Fusion, a furniture

manufacture. Most of the companys RCs are standard models and are sold on the basisof catalog prices. At December 31, 2012 Tk. 78,000 of finished RC appears in thecompanys inventory. Catalog prices of 2012 and 2013 are Tk. 98,000 and Tk. 92,000respectively. Estimated current cost to manufacture the RCs is Tk. 75,000 and expectedsales commission and other costs of disposal is Tk. 2,000. The 2012 catalog was in effectthrough November 2012, and the 2013 catalog is effective as of December 1, 2012. Allcatalog prices are net of the usual discounts. Generally, the company attempts to obtain a30% gross profit on selling price and has usually been successful in doing so. At whatamount should RC appear in the companys December 31, 2012, inventory assuming thatthe company has adopted a lower of cost or market approach for valuation of inventories?

(b) Presented below is information related to Prince Bazar. Assuming that Prince Bazar usesthe conventional retail inventory method, compute the cost of its ending inventory at June30, 2013.

Cost Retail Retail Inventory, 1.7.12 Tk. 30,000 Tk. 48,000 Gross sales Tk. 412,000 Purchases 339,500 520,800 Sales returns 28,300 Purchase returns 25,800 36,480 Markups 32,500 Purchase discounts 7,590 - Markup cancellations 8,320 Freight-in 8,920 - Employee discounts granted 3,400 Markdowns - 12,000 Loss from breakage (normal) 2,400

(c) Alvi Corporation has two classes of capital stock outstanding: 12%, Tk.100 par preferredand Tk. 30 par common. At December 31, 2012 the following accounts were included instockholders equity.

Preferred Stock, 80,000 shares Tk. 8,000,000 Common Stock, 800,000 shares 24,000,000 Paid-in Capital in Excess of Par Preferred Stock 1,600,000 Paid-in Capital in Excess of Par Common Stock 20,000,000 Retained Earnings 12,500,000

The following transactions affected stockholders equity during 2013.Jan. 1 25,000 shares of preferred stock issued at Tk. 125 per share. Feb. 1 70,000 shares of common stock issued at Tk. 80 per share. June 1 3-for-2 stock split (par value reduced to Tk. 20) July 1 60,000 shares of common treasury stock purchased at Tk. 90 per

share. Alvi uses the cost method.Sept. 15 15,000 shares of treasury stock reissued at Tk. 95 per share. Dec. 31 The preferred dividend is declared, and a common dividend of Tk.

0.25 per share is declared.Dec. 31 Net income is Tk. 8,250,000

Required: Prepare the stockholders equity section for Alvi Corporation at December 31, 2013.Show all supporting computations.

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


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= THE END =


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PROFESSIONAL LEVEL-ISUBJECT: 102. COST 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.(a) Describe the three main components of product cost. Select a product with which you are

familiar and provide examples of costs that would be classified under each of those threecomponents.

(b) During November the following transactions took place in Sevenhill ManufacturingCompany:(i) Materials purchased on account, Tk.35,600.(ii) Materials issued during the month as follows: to fill requisitions on job orders,

Tk.25,250, supplies issued to the factory, Tk.1,300.(iii) Materials issued to complete defective units, Tk.200.(iv) Freight paid for materials received, Tk.850. (Freight is not added to unit costs on

materials inventory cards).(v) Materials returned to the vendor during the month, Tk.225.(vi) Scrap materials received in the storeroom were set up at a value of Tk.175, and

credit was given to Factory Overhead Control for that amount. A separate generalledger account, Scrap Materials is used.

(vii) Materials returned to the storeroom during the month as follows: from job orders,Tk.1,090; from supplies issued to the factory, Tk.175.

(viii) Total payroll for the month as follows;Recorded and then paid liability for net pay to workers, Tk.41,503.Withheld for income tax, Tk.7,780.Withheld for hospitalization plan, Tk.950.Other deductions, Tk.2,367.

(ix) Employers liability for the Provident Fund is 6.5% of total payroll.(x) The payroll was distributed as follows: direct labor, Tk.40,200; indirect labor,

balance of payroll.(xi) Depreciation for the month: building, Tk.3,000; machinery, Tk.4,800.(xii) Property taxes accrued during the month, Tk.750; insurance expired with a credit to

the prepaid account, Tk.850.(xiii) Factory overhead is charged to production at a rate of Tk.1.40 per direct laborhour. Records show 19,200 direct labor hours used during the month.

(xiv) Close out the over or under applied factory overhead to Cost of Goods Sold.(xv) Cost of Goods completed during the month Tk.81,750.(xvii) Goods costing Tk.75,500 were sold on account during the month for Tk.90,000.


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CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-ISUBJECT: 102. COST ACCOUNTING.Q. No. 3.(a) Conventional costing systems apply manufacturing overhead costs to products using a

volume-based cost driver such as direct labour hours. What do we mean by the termvolume-based cost driver? What problems can arise with this approach to product costingwhen use in a modern manufacturing environment?

(b) The accountant of Camberwell Electronics Company believes that the identification of thevariable and fixed components of the firms costs will enable the firm to make betterplanning and control decisions. Among the costs the accountant is concerned about is thebehavior of indirect materials cost. She believes that machine hours are a cost driver forindirect materials costs.

A member of the accountants staff has suggested that regression analysis be used todetermine the cost behavior of indirect materials. The following regression equation wasdeveloped from 40 pairs of observations:

S = $200+$4Hwhere S = total monthly costs of indirect materials

H = machine hours per monthRequired:

(i) Explain the meaning of 200 and 4 in the regression equation S = $200 + $4H.(ii) Calculate the estimated cost of indirect materials if 900 machine hours are to be used

during a month.(iii) To determine the validity of the cost estimate calculated in requirement (ii), what questions

would you ask the accountant about the data used for the regression?(iv) Consider three other activities that could be used as cost drivers to predict the total

monthly costs of indirect materials.[Marks: 6+(4+3+4+3) = 20]

Q. No. 4.Kennelly and Sons manufactures components for the computer industry. The company uses anactivity-based costing system to assign labour, manufacturing overhead and non-manufacturingcosts to products. Below is a partially completed bill of activities for one of the companys majorproducts, Switch 3901.

Activity Cost per unit ofactivity driver

Annual quantity ofactivity driver

Prepare purchase order $43 per purchase order 50 purchase ordersProcess payables $27 per invoice received 50 invoicesPrepare payroll $10 per payslip 300 payslipsProcess sales orders $33 per sales order 500 sales ordersPack and dispatch $17 per sales order 500 sales ordersProgram solder robots $153 per program 200 programsSolder circuits $2 per solder joint 72,000 solder joints

Assemble circuit boards $5 per board 15,000 boardsWire in switch $14 per switch 5,000 switchesInsert fuse $10 per fuse 5,000 fusesTest switch $4 per switch 5,000 switchesDesign switch $5,000 for model 3901


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CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-ISUBJECT: 102. COST ACCOUNTING.Q. No. 4. (contd)

These annual costs relate to an annual production level of 5,000 switches. The direct materialcost per switch is $20.

Required:(i) Calculate the total cost per unit for Switch 3901.(ii) Calculate the manufacturing cost per unit for Switch 3901.(iii) Discuss the role that product costs that include both manufacturing and non-manufacturing

costs can play in management decision making.[Marks: (5+5+4) = 14]]

Q. No. 5.The following data relate to Sparkling Waters Ltd, a manufacturer of softdrinks:

Work in process, 1 February: (100% complete as to material;35% complete as to conversion cost)

10,000 units

Direct material $ 5,500Conversion $ 17,000

Costs incurred during February:Direct material $ 110,000Conversion $ 171,600

The equivalent units for February were as follows:Weighted average

Direct materialFIFO

110,000 100,000Conversion 92,000 88,000

During February, 89,000 units were completed and transferred out.Required:

(a) Calculate each of the following amounts using weighted average process costing:(i) Cost of goods completed during February.(ii) Cost of the 28 February work in process inventory.

(b) Repeat requirement (a) using the FIFO method.

[Marks: (10+12) = 22]

= THE END =


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PROFESSIONAL LEVEL-ISUBJECT: 103. MANAGEMENT & MARKETING MANAGEMENT.


Answer 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) Different types of management have different types of function - Explain.(c) Managerial process comprise four main task; planning, organizing, leading and

controlling. Your company want to launch a new product in the market, How canyou relate managerial functions with this decision. Explain briefly?

[Marks: (4+6+6) = 16]Q. No. 2.(a) What is the meaning of organizing? Identify the basic elements of organizations.(b) Describe the benefits and limitations of job specialization.(c) What are the alternative approaches you suggest in overcoming the limitations of

job specialization?[Marks: (6+4+6) = 16]

Q. No. 3.(a) Define control?(b) Why control is necessary?(c) What are the steps involved in the control process?

[Marks: (3+8+5) = 16]Q. No. 4.(a) How would you define and differentiate corporate level and business level

strategy? Give examples.(b) Which strategy should a firm develop first Business level or Corporate level

strategy? Explain why?(c) Explain use of SWOT for formulating strategy.

[Marks: (4+6+6) = 16]Q. No. 5.(a) Management is both science and Art;(b) Span of Control;(c) Supply Chain Management;(d) Corporate Governance.

[Marks: (4+4+4+4) = 16]

* Two Marks are reserved for neatness and relevance.


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CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-ISUBJECT: 103. MANAGEMENT & MARKETING MANAGEMENT.

PART B : MARKETING MANAGEMENT (TOTAL MARKS-50)

Q. No. 6.(a) Marketing is about identifying and meeting human and social needs explain.(b) Distinguish between social and managerial definition of marketing.(c) Explain with example the process of value creation in strategic marketing.

[Marks: (4+5+7) = 16]Q. No. 7.(a) Define Brand, Brand equity and Brand positioning.(b) Briefly describe marketing strategies at different stages of a product life cycle.(c) Differentiate between product and brand.

[Marks: (4+8+4) = 16]Q. No. 8.(a) What are the factors that influence the consumer buying behavior? Give a brief.(b) Describe the 5 stage model of consumer buying decision process.

[Marks: (8+8) = 16]

Q. No.9(a) What do you mean by market segmentation?(b) Discuss the advantages of market segmentation.(c) Explain major market segmentation.

[Marks : ( 4+6+6) = 16]

Q.No.10(a) What is marketing information system?(b) What are the components of marketing information system?(c) Design a marketing information system for Bangladesh Ice-Cream Co. Ltd.

[Marks : ( 4+6+6)=16]

* Two Marks are reserved for neatness and relevance.

= THE END =


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PROFESSIONAL LEVEL-ISUBJECT: 104. INFORMATION TECHNOLOGY.

Time: 2 hours 30 minutes Full Marks: 80 Answer any FOUR of the following questions. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

Q. No. 1.(a) What is computer based Information System? Why is the study of information systems

important to you?(b) What is the role of information system in todays competitive business environment?(c) Briefly discuss several data-storage issues that face the modern organization.(d) What ethical, social, and political issues are raised by Information Systems?

[Marks: (5+5+5+5) = 20]Q. No. 2.(a) What advantages and disadvantages are associated with the use of client/server

computing?(b) What role do the bridge, router, gateway and switch play in a network?

(c) What is telecommunicating? Why are many companies using it?(d) What is voice over IP (VoIP) and how could it be used in a business setting?

[Marks: (5+5+5+5) = 20]Q. No. 3.(a) What is a Traditional Filing System state problems with traditional filing system?(b) What are the elements in a database environment?(c) Differences between WI-FI and WI Max?(d) What is PAN, LAN, MAN, WAN?

[Marks: (8+4+4+4) = 20]Q. No. 4.(a) Prepare a checklist for selecting an accounting software for your organization.

(b) Discuss the classification of accounting software.(c) Describe the common modules of accounting software/List and explain eight core modulesthat accounting software may have.

[Marks: (8+6+6) = 20]Q. No. 5.(a) Define networking. Discuss some major advantages of networking.(b) What is meant by e-commerce? Describe the characteristics of e-commerce?(c) What are the benefits and limitations of e-commerce?(d) Briefly explain network management. Discuss its functions.

[Marks: (4 x 5) = 20]Q. No. 6.Write short notes on (any five):(a) Half-duplex channel;(b) Wi-Fi and Bluetooth;(c) Outsourcing;(d) Upload and Download;(e) Speech-Recognition Technology;(g) Point-of-Sale Device.

[Marks: (5 x 4) = 20]

= THE END =


20/58Page 1 of 4


PROFESSIONAL LEVEL-IISUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I.

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.(a) What are the advantages and disadvantages of leasing assets instead of owning them?(b) Purabi Leasing Co. Ltd. signs an agreement on January 01, 2008, to lease equipment to

Rana Enterprise. The following information relates to this agreement:(1) The term of the non-cancelable lease is 8 years with no renewal option. The

equipment has an estimated economic life of 10 years.(2) The equipment will revert to the lessor at the end of the lease term, at which time the

equipment is expected to have a residual value of Tk 500,000 which is guaranteedby Ran Enterprise.

(3) Rana Enterprise will bear the executory cost which include insurance cost of Tk.

15,000 and servicing cost of Tk. 9,000 per year. The executory cost is to be paid withannual rental payment.

(4) The agreement requires equal rental payment of Tk. 250,000 to Purabi leasingbeginning on January 01, 2008.

(5) Rana Enterprise can borrow at 12% to purchase this type of equipment while PurabiLeasing expects 10% returns on its investment. Purabis expected rate of return isknown to Rana Enterprise.

(6) Rana Enterprise uses the straight line depreciation method for all equipment.(Present Value of Tk. 1 payable annually at beginning for 8 years at 10% interest rate is5.86842 and at 12% is 5.56376.Present value of Tk. 1 payable at the end of 8 th

Assets

year at 10% interest rate is 0.46651 and at12% is 0.40388)

Required:(i) Do you think that the lease is capital one? Explain.(ii) Prepare an amortization schedule for Rana Enterprise.(iii) Prepare all journal entries for Rana Enterprise for the years 2008 and 2009.(iv) Prepare Balance Sheet as on December 31, 2008 for Rana Enterprise reflecting lease

related items only. Assume Rana Enterprise follows calendar year to prepare FinancialStatements.

(v) Assume that instead of paying installment due on 01.01.2010 Rana Enterprise offered topurchase the equipment for Tk. 13,40,000. What journal entry would Rana pass on01.01.2010 ?

[Marks: {5 + (3 x 5)} = 20]Q. No. 2

The Balance Sheet of Universal Traders Ltd as on January 01, 2012 is given below:Liabilities and CapitalCash Tk. 80,000

Accounts Receivable 160,000Merchandise Inventory 96,000Store Furniture & Fixture 48,000Less- Allow. for depre 15,600

Accrued Expenses Tk. 1,500 Accounts Payable 40,000Capital Stock 250,000Retained Earnings

32,400Total Assets Tk. 368,400

76,900

Total Liabilities & Capital Tk. 368,400


21/58Page 2 of 4

CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-IISUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I.Q. No.2.(Contd.)

On January 01, 2012 the company established a branch sales office at Jessore. The branch issent the following assets by Head Office upon its organization:a) Cash Tk. 30,000

b) Merchandise, Cost Tk. 30,000, billed at 120% of cost.c) Store furniture and fixture previously used by head office Cost Tk. 10,000; age, 5 years;depreciation rate used in the past, 10% a year. The cost of shipment and installation, Tk.1,500, is paid by the branch. The cost is to be written off over the remaining life of theasset. The fixed assets accounts are to be carried on the books of branch office.

Head office and branch transactions with outsiders during the year 2012 were:Head Office

a) Merchandise billed Tk. 12,000 was shipped by head office to the branch on December 30,2012; this merchandise is in transit and will not reach the branch until January 2013. (Thisshipment is not included in the transfer previously mentioned).

BranchSales on account Tk. 250,000 Tk. 175,000Collection on accounts 280,000 140,000Purchase on account 220,000 120,000Payment on account 240,000 115,000Payment of expenses (including accruals as of January 01) 30,000 5,000

Interoffice transactions during 2012 were:Merchandise shipment to branch at billed price Tk. 60,000Cash remittance to Head office 25,000

The following information is to be recorded on December 31, 2012:

b) Expenses paid by the head office during the year that are chargeable to the branch totalTk. 6,000. (These are included in the Tk. 30,000 amount)

c) Depreciation on furniture and fixtures is recorded at the rate of 10% a year.d) Merchandise inventories, excluding merchandise in transit, are, head office Tk. 60,000;

branch Tk. 40,000, composed of merchandise received from head office at billed price, Tk.9,600.

e) Accrued expenses are: head office, Tk. 1,800; branch, Tk. 900.Required:(i) Prepare journal entries including adjusting entries to record the foregoing transactions for

(a) the head office and (b) the branch office.(ii) Prepare individual Income Statement for the year ended December 31, 2012 and Balance

Sheet as on December 31, 2012 for the head office and branch.[Marks: (10 + 10) = 20]

Q. No. 3.(a) When the outcome of a contract can be estimated reliably as per IAS 11?(b) How the stage of completion of a construction contract may be determined as per IAS 11?(c) What do you mean by (i) Jointly Controlled Operations, (ii) Jointly Controlled Assets, and

(iii) Jointly Controlled Entities ?(d) National Engineers Ltd. Commenced work on 1 st January 2011, on a contract of which the

agreed price was Tk. 50,00,000. The following expenditure was incurred during the year to31 st December 2011:

Wages Tk. 14,00,000Plant 3,50,000Materials 10,50,000Sundry Expenses 65,000Head Office Charges 1,25,000


22/58Page 3 of 4

CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-IISUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I.

Q. No.3.(Contd.)

Certain of the materials costing Tk. 1,00,000 proved unsuitable and were sold for Tk. 1,15,000,and part of the plant was scrapped and sold for Tk. 17,000.Of the contract price Tk. 24,00,000 representing 80% of the work certified, had been receivedby 31 st December 2011, and on that date the value of the plant, on the job was Tk. 80,000 andthe value of the materials Tk. 30,000. The cost of the work done but not certified was Tk.2,50,000.It was decided to estimate what further expenditure would be incurred in completing thecontract, to compute from this estimate and the expenditure already incurred the total profit thatwould be made on the contract and to take to the credit of the Profit and Loss Account for theyear ended December 31 st

a) That the total contract would be finished by 30

2011, and that proportion of the total profit which corresponded withthe work certified. The estimates were as follows:

th

b) That wages to complete would amount to Tk. 8,49,500;June, 2012;

c) The materials in addition to those in stock on 31 st

d) That a further Tk. 1,50,000 would have to be spent on plant and that the residual value ofthe plant on 30

December, 2011, would cost Tk.5,00,000, and sundry expenses on the contract Tk. 35,000 further;

th

e) That head office charges to the contract would be at the same annual rate as in 2011;June, 2012, would be Tk. 60,000;

f) That the claims, temporary maintenance and contingences would require Tk. 90,000.Prepare Contract Account for the year ended 31 st

Accounts Titles

December, 2011 and show your calculation ofthe sum to be credited to Profit and Loss Account for the year.

[Marks: (4+3+13) = 20]Q. No. 4.The following Trial Balance was extracted from the books of the Popular Life AssuranceCompany as on December 31, 2012;

Dr. (Tk.) Cr. (Tk.)Issued and Subscribed Capital: 10,000 shares of Tk.15each, Tk.10 called

1,00,000

Life Assurance Fund on 01.01.2012 29,00,300Dividend Paid 16,000Bonus to policy-holders 30,500Premium received 2,33,500Claims paid 1,97,000Commission paid 9,300Management expenses 32,300Mortgage in Bangladesh 4,92,200Interest and Dividend received 1,12,700

Agents Balances 9,300Freehold premises 40,000Investments 23,00,000Loan on companys policies 1,78,600Cash Deposits 27,000Cash in hand 7,300Surrenders 7,000 ...

Total 33,46,500 33,46,500


23/58Page 4 of 4

CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-IISUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I.Q. No.4.(Contd.)

Adjustments:(i) Claims admitted but not paid Tk.10,000;(ii) Management expenses due Tk. 1,200;

(iii) Interest accrued Tk.21,300;(iv) Premiums outstanding Tk.10,000;(v) Bonus utilized in reduction of premium Tk.6,000; and(vi) Claims covered under re-insurance Tk.2,300.Required: (a) Revenue Account and (b) Balance Sheet.

[Marks: (10+10) = 20]Q. No. 5.The following details were available regarding the affairs of Emacol Ltd as at 31 December 2012when the company was contemplating filing a petition for liquidation or reorganization:

Accounts payableTaka97,500

Mortgage Notes payable 100,000

Bank Notes payable 16,000Cash in Hand 2,000Cash at Banks 2,100Notes Receivable 12,000

Accounts Receivable (estimated collectible value: Tk.14,000) 23,500Wages and Salaries due to 3 employees 6,750Interest Payable- Bank Notes 550Interest Payable- Mortgage Notes 4,250Inventories Finished Goods 28,000Inventories Work in Progress 12,000Inventories Raw Materials 19,500Prepaid Insurance (estimated recovery value: Tk.300) 600Investment in Stock 13,250Capital Stock 125,000Retained Earnings (deficit) (70,600)Land (appraised value: Tk.20,000) 21,000Building Net (appraised at Tk.50,000) 99,000Plant and Machinery Net (estimated disposal value: Tk.19,000) 46,500

(a) The Notes Receivable are expected to be fully realized, and they have been pledged ascollateral on a Bank Note in the principal amount of Tk.10,000 plus interest payable ofTk.300.

Additional Information:

(b) Finished goods inventory can be sold at a mark-up of 20% over cost, with estimatedselling expenses of 10% of selling price.

(c) Inventories-WIP required Taka 6,000 to complete, of which Taka 2,500 represents the costof raw materials. Estimated selling price of the completed WIP inventories is Taka 12,500.

(d) Estimated selling price of the raw materials is Taka 11,900.(e) Investment in stock is pledged as collateral on a Bank Note Payable in the principal

amount of Taka 6,000 plus interest payable of Taka 250.(f) Land and Buildings serve as collateral on the Mortgage Note Payable.Required: Prepare a Statement of Affairs for Emacol Ltd. along with a Deficiency Account.

[Marks: 20]

= THE END =


24/58Page 1 of 4


PROFESSIONAL LEVEL-IISUBJECT: 202. MANAGEMENT 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.(a) Explain how costs and benefits are relevant to the design of management accounting

systems.(b) Give an example of management accounting information that could be use by a manager

to make each of the following decisions. Remember to consider non-financial informationwhere relevant.(i) The manager of a discount department store is deciding how many security

personnel to employ to reduce shoplifting.(ii) A city council is deciding whether to build an extension to the public library.

(iii) The manager of a rental car agency is deciding whether to add luxury cars to therental car fleet.

(iv) The production manager in a car manufacturing plant is deciding whether to haveroutine maintenance performed on a machine weekly or every two weeks.

(c) What are the advantages and limitations of the four types of benchmarking?[Marks: (4+6+8) = 18]

Q. No. 2.(a) Discuss the following comment by the manager of a small manufacturing company:

Budgeting is a waste of time. Ive been running this business for forty years. I dont needto plan.

(b) The annual flexible budget of Tesco Lotus Ltd is as follows:

Capacity 40% 60% 80% 100%Tk.Costs Tk. Tk. Tk.

Direct labor 16,000 24,000 32,000 40,000Direct Materials 12,000 18,000 24,000 30,000Production Overheads 11,400 12,600 13,800 15,000

Administration costs 5,800 6,200 6,600 7,000Selling and Distribution cost 6,200 6,800 7,400 8,000

51,400 67,600 83,800 1,00,000Owning to trading difficulties, the Company is operating at 50% capacity. Selling prices havehad to be lowered to what the directors maintain in an uneconomical level and they areconsidering whether or not their single factory should be closed down until trade recession haspassed.

A market research consultant has advised that in about 12 months time there is every indicationthat sales will increase to about 75% of normal capacity and that the revenue to be produced inthe second year will amount to Taka 90,000. The present revenue from sales at 50% capacitywould amount to only Tk. 49,500 for a complete year.If the directors decided to close down the factory for a year, it is estimated that:(i) The present fixed cost would be reduced to Tk. 11,000 p.a.(ii) Closing down cost would amount to Tk. 7,500.(iii) Necessary maintenance at plant would cost Tk. 1,000 p.a.


25/58Page 2 of 4

CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-IISUBJECT: 202. MANAGEMENT ACCOUNTING.

Q. No. 2.(contd.)

(iv) On reopening the factory, the cost of overhauling plant, training and engagement of newpersonnel would amount to Tk. 4,000.

Required:Prepare a statement for the directors presenting the information in such a way as to indicatewhether or not it is desirable to close the factory.

[Marks: (5+15) = 20]Q. No. 3.Berwin Ltd is a manufacturer of small industrial tools with annual sales of approximately $7million. Sales growth has been steady during the year and there is no evidence of cyclicaldemand. Production has increased gradually during the year and has been evenly distributedthroughout each month.Carla Viller, the accountant, has designed and implemented a new budget system in responseto concerns voiced by CEO George Berwin. Carla prepared an annual budget that has been

divided into 12 equal segments; this budget can be used to assist in the timely evaluation ofmonthly performance. George was visibly upset upon receiving the May performance report forthe machining department. He exclaimed: How can they be efficient enough to produce nineextra units every working day and still miss the budget by $300 per day! Gene Jordan, thesupervisor of the machining department, could not understand all the red ink when he knewthat the department had operated more efficiently in May than it had done in months. Genestated: I was expecting a pat on the back. Instead, the boss tore me apart. Whats more, I donteven know why!

Berwin LtdMachining Department

Performance ReportFor the month ended 31 May 2008

Budgeted Actual Variance

Volume in units 3,000 3,185 185 FVariable manufacturing costs:

Direct materials $24,000 $24,843 $ 843 UDirect labour 27,750 29,302 1,552 UVariable overheads 33,300 35,035 1,735 UTotal variable Costs $85,050 $89,180 $4,130 U

Fixed manufacturing Costs:Indirect labour $ 3,300 $ 3,334 $ 34 UDepreciation 1,500 1,500 0Taxes 300 300 0Insurance 240 240 0Other 930 1,027 97 UTotal fixed costs $ 6,270 $ 6,401 $ 131 U

Corporate costs:Research and development $ 2,400 $ 3,728 $1,328 USelling and administrative 3,600 4,075 475 UTotal corporate costs $6,000 $ 7,803 $1,803 UTot al co sts $97,320 $103,384 $6,064 U


26/58Page 3 of 4


Q. No. 3(contd.)

Required

(a) Discuss the strengths and weaknesses of the new budgetary system.

(b) Identify the weaknesses of the performance report and explain how it should be revised toeliminate each weakness.

(c) Prepare a revised report for the machining department using the May data.

(d) What other changes would you make to improve Berwins budgetary system?

[Marks: (4+4+8+4) = 20]

Q. No. 4.

(a) Hawaiian Candy Company is a wholesale distributor of candy. Small but steady growth insales has been achieved by the company over the past few years while candy prices havebeen increasing. The company is manufacturing its plans for the coming fiscal year.

Presented below are the data used to project income of $184,000.

Average selling price $4.00 per box

Average variable costsCost of Candy $2.00 per boxSelling expenses $0.40 per boxTotal $2.40 per box

Annual fixed costs

Selling $160,000 Administrative 280,000Total $440,000

Expected annual sales volume (390,000 boxes) $1,560,000

The manufacturing of the candy have announced that they will increase prices of their productsby 15 percent in the coming year. The company expects that all other costs will remain thesame rates or levels as the current year.

Required:

(i) What is Hawaiian Candy Companys breakeven point in boxes of candy and in dollaramount for the current year?

(ii) Calculate margin of safety and degree of operating leverage of the current year. What willbe change in expected profit if expected sales are increased by 15%?

(iii) What selling price per box must the company charge to cover the 15 percent increase inthe cost of candy and still maintain the current contribution margin ratio?


27/58Page 4 of 4


Q. No. 4. (contd.)

(b) The management of Baker Company is considering the elimination of an unprofitableproduct. Data for its three major products are as follows:

Snap CrackleSales

Pop$4,000 $2,000 $1,000

Manufacturing Costs 2,800 1,200 600Fixed Operating expenses 800 600Income

800$400 $200 $(400)

Variable cost ratio 40% 30% 50% Allocated fixed ratio $ 200 $ 200 $200

Allocated fixed costs would not be affected by a decision to drop a product. However, 50% offixed costs (both manufacturing and operating) identified with a product would be dropped if theproduct were eliminated.

Prepare an analysis to see whether pops should be eliminated.[Marks: (4+6+4) + 8 = 22]

Q. No. 5.(a) Would you recommend variable costing or absorption costing as a source of information

for managers? Explain your answer.(b) Slim and Trim produces frozen yoghurt, a low-fat dairy dessert. The product is sold in five-

litre containers and had the following price and variable costs per unit in the current year:Sales price $27.00Direct material 9.00Direct labour 3.60Variable overhead 5.40

Budgeted fixed overhead for the current year was $600,000, which was equal to actualfixed overhead. Actual production was 150,000 five-litre containers, which was equal tothe budgeted level of production, but only 125,000 containers were sold. Slim and Trimincurred the following selling and administrative expenses:

Fixed $100,000Variable $2 per container sold.

Required:

(i) Calculate the cost per unit under variable and absorption costing.(ii) Prepare income statements for the current year using:

(a) Absorption costing;(b) Variable costing.

(iii) Reconcile the profits reported under the two methods.[Marks: 6 + {3 + (4+4) + 3} = 20]

= THE END =


28/58Page 1 of 2


PROFESSIONAL LEVEL-IISUBJECT: 203. COMMERCIAL & INDUSTRIAL LAWS.

Answer SIX questions taking any THREE from each part, including compulsory questionNo. 5 and 10.


Answer must be brief, relevant, neat and clean. Use a fresh sheet for answering each question. Start answering each question from a fresh sheet.

PART-A: COMMERCIAL LAWS

Q. No. 1.(a) Every agreement by which any one is restrained from exercising a lawful profession,

trade or business of any kind is to that extent void Explain with at least two examples.(b) By whom is a contract to be performed? Who can demand performance?[Marks: (8 + 7) = 15]

Q. No. 2.Discuss the circumstances where the object or consideration of an agreement is unlawful?

[Marks: 15]Q. No. 3.(a) Define Negotiable Instrument. Name the Negotiable Instruments that are recognized by

statute and recognized by usage or custom.

(b) What conditions are implied in arbitration agreement?(c) Differentiate between Common carriers and Private carriers.

[Marks: (5+5+5) = 15]Q. No. 4.(a) What are the distinctions between Bill of Exchange and Cheque.(b) What are the rules of Endorsement?

[Marks: (8 + 7) = 15]Q. No. 5.Write short notes on any 4(four) of the following:(a) Misrepresentation.

(b) Undue influence.(c) Bill of Lading.(d) Trade Mark.(e) Promissory Note.(f) Doctrine of Caveat emptor.

[Marks: (5 x 4) = 20]


29/58Page 2 of 2

CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-IISUBJECT: 203. COMMERCIAL & INDUSTRIAL LAWS.

PART-B: INDUSTRIAL LAWS

Q. No. 6.(a) What is lay off? Discuss the rate of compensation to workers for lay off. Under what

conditions laid off workers are not entitled to get any payment?(b) What are the procedures of retrenchment? Is an employer under any obligation bound to

reemploy a retrenched worker?[Marks: (8+7) = 15]

Q. No. 7.(a) Describe the provisions of (i) Interval for rest or meal and (ii) Weekly hours as per the BLA

2006.(b) Narrate shortly the provisions of Annual leave with wages as per the BLA 2006.

[Marks: (8 + 7) = 15]

Q. No. 8.Discuss the liability of a Garments Owner in respect of safety of the workers as per the BLA2006.

[Marks: 15]Q. No. 9.(a) What are the functions of Labour Appellate Tribunal?(b) What is unfair labour practice? What are the unfair labour practices on the part of the

employer?

[Marks: (8 + 7) = 15]Q. No. 10.Write short notes on any 4(four) of the following:(a) Trade Union and CBA.(b) Strike & lockout.(c) Annual Leave.(d) Maternity benefit.(e) Temporary workers and Probationary workers.

[Marks: (4 x 5) = 20]

= THE END =


30/58Page 1 of 3

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESHCMA AUGUST 2013 EXAMINATION

PROFESSIONAL LEVEL-IISUBJECT: 204. TAXATION

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.(a) Write short notes on the following:-

(i) Minimum tax for partnership firm;(ii) Amortization of Licence fees; and(iii) Changes in forms of Income Tax Return for assessment year 2013-14.

(b) Briefly explain the tax implications in following cases:-(i) Rental Power Company; and(ii) Investment in residential building and apartment u/s 19BBBBB.

[Marks: {(2+2+3) + (2x3)} = 13]Q. No. 2

(a) What incentives are given to SMEs through the Finance Act 2013?(b) What are the consequences if advance payment of tax is more or less than the requiredamount?

(c) Briefly explain the role of facilitator at ADR. How will his fees be determined?(d) Specify the requisite tax to be paid at every stage of first appeal, second appeal, reference

to the High Court Division and appeal to the Appellate Division of the Supreme Court.[Marks: (4 x 4) = 16]

Q. No. 3From the following particulars compute the total income and tax liability of Mr. X for the incomeyear ending 30 June, 2013:-(a) Salary Income :

Basic salary: Tk. 20,000 p.m.

Entertainment allowance: 20% of basic salaryBonus: equivalent to 2 months basic salaryFree accommodation (out of which 1 room was sub-let by Mr. X for Tk.3, 000 p.m.), rentalvalue being Tk. 72,000 p.a.Medical allowance: Tk. 500 p.m. (actual expense Tk. 8,000)Conveyance allowance: Tk. 3,000 p.m.Subscription to RPF: 10% of basic salary (Employer also contributed the same).

(b) Interest on Securities :Interest on SEC approved debenture Tk. 10,000/-Interest on Government securities. 70,000/- (TDS @ 10% Tk. 7000/- under upfront system3 years ago).

(c) Income from House Property :

Mr. X has one residential house one half of which is let out at a monthly rent ofTk. 50,000/- and the other half is self-occupied.Following actual expenditures were incurred by Mr. X for the full house:-

TakaMunicipal tax 20,000Repairs and maintenance 60,000Insurance premium 12,000Salary of caretaker 30,000Interest on house building loan ( actually paid Tk. 50,000/-) 1,47,000


31/58Page 2 of 3

CMA AUGUST 2013 EXAMINATIONPROFESSIONAL LEVEL-IISUBJECT: 204. TAXATION

Q. No. 3. (contd.)

(d) Income from Partnership Business :50% share income from a partnership firm is Tk. 1,46,000 (after tax).Firms total income was Tk. 3,00,000/- (tax came at Tk. 8,000/-), but the firm did not payany tax rather it preferred appeal and now it is pending at appeal stage.

(e) Capital Gain :Gain from sale of shares of listed companies Tk. 5,27,335/-.

(f) Income from Other Sources :Cash dividend (net of tax) from a listed company Tk. 45,000/-Stock dividend of 100 shares (Face value TK. 10 but market price on that day Tk. 1500/-per share).Interest (net of tax) on savings bank account Tk. 5,400/-.

(g) During the year Mr. X made the following investments:-(1) Life insurance premium at the name of his dependent old father Tk. 60,000 (Policy

Value TK. 500,000);(2) Investment in secondary shares of listed companies Tk. 1,00,000;(3) Donation to Prime Ministers relief fund Tk. 10,000/-.

[Marks: 20]Q. No. 4.From the following Profit and Loss Account of PQ Ltd. for the year ended on 30 June 2013,determine total income and tax liability:

Profit and Loss AccountTaka Taka

Directors Remuneration 46,000 Gross profit 4,75,000Salaries & Wages 1,00,052 Dividend Income 30,000Contribution to Provident Fund 8,800 Share Premium 30,000Rent & Taxes 24,500 Sundry Income 13,000Repairs and Operating Expenses 27,300 Capital gain on sale of machine 40,000Electricity 17,500Insurance 8,000Legal Expenses 14,500

Audit Fee 5,800Printing, Stationery and Postage 14,600Compensation for Termination of a Staff 10,000Typewriter 5,948

Advertisement 12,200Entertainment 9,500Provision for Bad Debt 4,400Depreciation 46,600Net Profit 2,32,300

5,88,000 5,88,000Other Information:a) Rent and Taxes included Value Added Tax (VAT) of Tk. 4,200/- which was paid for

importing a machine and it was not used during the relevant year.b) Legal expenses included a sum of Tk. 10,000/- spent for income tax appeal.c) Provident Fund is recognized by the Income Tax Authority.d) Bad debt written off previously was recovered during the year Tk. 2,000/-.


32/58Page 3 of 3

CMA AUGUST 2013 EXAMINATIONPROFESSIONAL LEVEL-IISUBJECT: 204. TAXATION

Q. No. 4. (contd.)

e) Allowable tax depreciation Tk. 58,400/-f) Repairs and operating expenses included Tk. 6,000/- spent fo installation of a second

hand air conditioner in the residence of Managing Director.g) Entertainment expenses included Tk. 2,000/- for which no clear explanation was available

and miscellaneous expenses of Tk. 5,276/- which proved to be personal expenses of aManager.

h) Company declared dividend @ 22% on paid up capital for the shareholders.i) The Company is a trading company and not listed in any stock Exchange.

[Marks: 20]Q. No. 5.M/S. Asa Electronics has imported electronic parts which will be assembled and packed inBangladesh. Due to increase in the last consignment price, the company needs to increase itsproduct price, for which it has to submit VAT FORM-1 to the VAT authority.The imported consignment consisted of 10,000 units at a C&F (cost & freight) value of USD 60

per unit. The exchange rate was Tk. 78 for 1 US dollar. Applicable duties and tax were: Customduty @ 12%, Supplementary duty @ 10%, Advance income tax @ 5%, VAT @ 15% and ATV@ 4%. Customs authority added 1% of C&F value as insurance cost and 1% of CIF value aslanding charge to determine the assessable value.

After importation, the companys carrying and other cost was Tk. 40 per unit, labour cost Tk.200 per unit and overhead 50% of labour cost. For assembling and packing, the company used2 articles locally, article A at a cost of Tk. 80 per unit without any VAT for exemption and articleB at a cost of Tk. 200 per unit plus 15% VAT therefor.

As per management policy, the companys mark up profit is 20% of cost.Required: Determine (a) Assessable Value for Customs clearance.(b) Total duties and taxes, including VAT, AIT and ATV.

(c) Per unit sales price for submission of VAT Form-1.(d) Output VAT per unit, Input VAT per unit and VAT liability per unit after input VAT credit.[Marks: (4 x 4) = 20]

Q. No. 6(a) Briefly describe the PSI system for imposition of import duty under section 25B of the

Customs Act, 1969. Comment on the conversion of mandatory PSI into optional one witheffect from 01 July, 2013.

(b) Who is required to pay VAT as per section 3 of the VAT Act, 1991? How is excise dutybeing collected now?

(c) Distinguish between tax avoidance and effective tax planning. Why should one considerthe income tax authority as a party in a new project even if the project is exempt from tax?

[Marks: (4+4+3) = 11]

= THE END =


33/58Page 1 of 5

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESHCMA AUGUST 2013 EXAMINATION

PROFESSIONAL LEVEL-IIISUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II

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.(a) MUTTAKEEN LTD. reported number of Shares outstanding 50,00,000 and Basic Earnings

per Share (EPS) is Tk. 2.00. The company has 10,00,000 of 12% convertible Debentureof Tk. 10 each (each debenture is convertible into 1 ordinary share). Tax Rate is 37.50%.Calculate the Basic EPS again and the Diluted Earnings Per Share of the company as perIAS-33.

(b) You are the CFO of MONYEM PHARMA AID LTD. and you are asked for prepare amanagement information system (MIS) report with the following data for the managementfor decision making based on IFRS-8.

Particulars

Amount

(Tk. inmillions)

Amount

(Tk. inmillions)Sales:Food Products Plastic & Packaging .Health & Scientific Others ..Expenses:Food productsPlastic & Packaging ..Health & Scientific .Others..

Other Items:General Expenses Income from Investments Interest expenses .Identifiable Assets:Food Products ..Plastic & Packaging .Health & Scientific Others

General Assets .

5,650625345162

6,782

4,182

562132

65

10,355722

3,335425222200

7,3201,3201,050

665

Other Information:

(i) Inter Segment Sales:Food Products . Tk. 55 millionsPlastic & Packaging .Tk. 72 millionsHealth & Scientific Tk. 21 millionsOthers Tk. 7 millions

(ii) Opening profit includes Tk. 33 millions on inter-segment sales;(iii) Information about inter-segment expenses are not available.Required: Prepare a statement showing financial information about MONYEM PHARMA AIDLTD.s operation in different industry segments as per IFRS-8.

[Marks: (6 +14) = 20]


34/58Page 2 of 5

CMA AUGUST 2013 EXAMINATIONPROFESSIONAL LEVEL-IIISUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II

Q. No. 2.On 1 July 2012, MMH Ltd acquired 80% of the share capital of Muaz Ltd for Tk.150,000 andMuaz Ltd acquired 60% of the share capital of Mahran Ltd for Tk.99,400. At that date, theshareholders' equity of Muaz Ltd and Mahran Ltd were as follows:

Muaz LtdShare capital ..

Mahran LtdTk. 100,000 Tk.100,000

General reserve . 60,000 40,000 Asset revaluation reserve 4,750 3,000Retained profits.. 25,000 10,000

At acquisition date, the assets and liabilities of Muaz Ltd and Mahran Ltd were recorded atcarrying amounts equal to their fair values, the non-current assets being revalued immediatelyprior to the acquisitions of shares by MMH Ltd. and Muaz Ltd. The nonmonetary assets of MuazLtd at 1 July 2012 consisted of:

Plant .. Tk.120,000Motor vehicles.. 40,000Inventory 20,000

The motor vehicles and plant of Muaz Ltd were expected to have remaining useful lives of 5 and10 years respectively. The inventory on hand at 1 July 2012 was all sold by 30 June 2013. Anygoodwill acquired is amortized evenly over a 10-year period. At 1 July 2012, Mahran Ltd hadrecorded goodwill ofTk.9,000. the tax rate is 30%.A d d i t i o n a l i n f o r m a t io n

(a) The profit and loss statements of MMH Ltd and its two subsidiaries, Muaz Ltd and MahranLtd, for the year ended 30 June 2013 were as follows:

MMH Ltd Muaz LtdSales revenue.

Mahran LtdTk.400,000 Tk.350,00 Tk.320,000

Other revenue 80,000 70,000Total revenue

50,000480,000 420,000 370,000

Cost of sales 210,000 252,000 185,000Other 180,000 141,800 165,000

390,000 393,800Profit before income tax

350,00090,000 26,200 20,000

Income tax expense 22,000 8,700Net profit

9,00068,000 17,500 11,000

Retained profits as at 1/7/2012 16,000 25,000 10,00084,000 42,500

Interim dividend paid 21,000

7,500 2,500 1,000Final dividend provided 12,500 5,000 2,000

20,000 7,500Retained profits as at 30/6/2013

3,000Tk.64,000 Tk.35,000 Tk.18,000

(b) During the year ended 30 June 2013, all dividends paid and provided were out of profitsearned since 30 June 2012, except for the Tk.1,000 interim dividend paid by MahranLtd, which was provided for out of profits for the year ended 30 June 2012.

(c) Inter-entity sales for the year:Muaz Ltd to Mahran Ltd. ..Tk.20,000Mahran Ltd to MMH Ltd. 10,000

(d) Profits in ending inventory through inter-entity sales were:Inventory of Mahran Ltd. . Tk.3,000Inventory of MMH Ltd .. 500


35/58Page 3 of 5


Q. No. 2.(contd.)

(e) On 1 January 2013, Mahran Ltd sold machinery to MMH Ltd for Tk. 42,000. Carryingamount of the machinery on date of sale was Tk.43,500. MMH Ltd charged depreciationon machinery at the rate of 10% per annum on a straight-line basis.

(f) Net profit attributable to outside equity interests = Tk. 8,625Required: Prepare the consolidated statement of financial performance at 30 June 2013 withnotes.

[Marks: = 20]Q. No. 3.H Ltd. acquired a 70% interest in the equity shares of F. Ltd. for Tk. 750,000 on January 1,2011. The abridged statement of financial position of both companies at the date of acquisitionwere as follows.

H. Ltd. Tk.(000) F. Ltd. (Tk.000)Identifiable assets 8200 2000

Investment in F. Ltd. 750 -8950

Equity2000

6000 1200Identifiable liabilities 2950 800

8950 2000The fair value of the identifiable assets of F. Ltd. amounts to Tk. 2800,000 and the fair value ofthe liabilities is Tk. 800,000. The non controlling interest will be measured as a percentage ofnet assets of the acquire. Demonstrate the results of the acquisition.(b) (i) A reportable segment is an operating segment or results from the aggregation of two ormore operating segments that meets any of the quantitative threshold. Discuss.(ii) Hollier Inc is a diversified entity that operates in nine operating segments organized around

differences in products and geographical areas. The following financial information relates to theyear ending June 30, 2015.$ 000

Nature of business Total Sales External Sales Total profitsBeer

Total Assets2,249 809 631 4,977

Beverages 1,244 543 -131 3,475Hotels 4,894 4,029 714 5,253Retail 3,815 3,021 -401 1,072Packaging 7,552 5,211 1,510Totals:

8,25819,754 13,613 2,323 23,035

Geographical areas Total Sales External Sales Total profitsFinland

Total Assets7,111 6,841 1,536 9,231

France 1,371 1,000 -478 5,001United Kingdom 3,451 2,164 494 3,667

Australia 7,821 3,608 771Totals

5,13619,754 13,613 2,323 23,035

As per IFRs- 8 identify the reportable operating segments on the basis of the reports mentionedabove.

[Marks: (6+4+10) = 20]


36/58Page 4 of 5


Q. No. 4.(a) Define National Income of Country and how it is computed?(b) The following data relates to the national Income Account of a Country for the year-2012.

Total domestic expenditure at market priceTaka in million

37,250Capital consumption 2,720Property income received in abroad 1,730Indirect taxes 6,550Import of goods and services 6,970Property Income paid abroad 1,230Subsidies 2,500Export of goods and services 6,350Capital grant by government to government 1,500

Compute:(i) Gross domestic product at factor cost.(ii) Gross National product at factor cost.(iii) National Income.

[Marks: (5 + (3 x 5) = 20]Q. No. 5.On January 1, 2009, R & Co. purchased 80 percent of S & Co.'s ordinary shares for Tk. 56,000.

At acquisition, S & Co. reported net assets of Tk. 60,000. Trial balance for the two companieson December 31, 2012 were as follows:

R & Co.Items

S & Co.Dr. Cr. Dr.

CashCr.

26,060 2,000 Accounts Receivable 16,000 14,000Inventory 34,000 22,000Buildings & Equipment 120,000 80,000Investment in S & Co.'s ordinary shares 60,800Cost of Goods Sold 83,200 40,400Depreciation & amortization 6,000 4,000Other Expenses 4,800 3,600Dividends Declared 10,000 5,000

Accumulated Depreciation 62,000 24,000 Accounts Payable 20,000 3,040Bonds Payable 60,000 20,000

Bond Premium 960Ordinary Shares 40,000 20,000Share Premium 4,000Retained Earnings, January 1, 2012 69,180 43,000Sales 100,000 50,000Other income 4,080 6,000Income from Subsidiary 5,600

360,860 360,860 171,000 171,000


37/58Page 5 of 5


Q. No. 5.(contd.)

Additional information:1) The purchase differential is assigned to buildings and equipment that had a remaining 10-

year economic life at the date of combination with a salvage value of zero.2) R & Co. regularly purchases inventory from S & Co. During 2011, S & Co. sold inventory

Costing Tk. 8,000 to R & Co. for Tk. 12,000 and R & Co. resold 60% of the inventory in2011 and 40% in 2012 to non affiliates.

3) During 2012, S & Co. sold inventory costing Tk. 6,000 to R & Co. for Tk. 9,000, and R &Co. resold before end of year 2012, one-third of the inventory purchased from S & Co. tonon-affiliates.

4) R & Co. sold equipment purchased at Tk. 15,000 to S & Co. for Tk. 10,000 on December31, 2010. Accumulated depreciation over the 12 years of use before the intercorporatesale was Tk. 9,000. The estimated remaining life at the time of transfer was eight years.Straight line depreciation is used by both companies.

5) R & Co. owes to S & Co. Tk. 2,000 on account on December 31, 2012.Required (apply either Parent Company approach or Entity approach):(a) Give all journal entries recorded by R & Co. with regard to its investment in S & Co. during

2012 under equity method.(b) Give all eliminating entries needed to prepare consolidated financial statements for the

year 2012.(c) Prepare equity method consolidated workpaper as of December 31, 2012.

Marks: (3+6+11) = 20]

= THE END =


38/58Page 1 of 5


PROFESSIONAL LEVEL-IIISUBJECT: 302. ADVANCED COST ACCOUNTING


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.a) Express an opinion as to the usefulness of data, derived from process costing, for the

control of costs.b) Western Corporation has two producing departments, Fabricating and Finishing. In the

Fabricating Department, Polyplast is prepared from Miracle Mix and Bypro. In the finishingDepartment, each unit of Polyplast is converted into six Tetraplexes and three Uniplexes.Service Department provides services to both producing services. The Fabricating andFinishing Departments use process cost procedures. Actual production costs, includingfactory overhead, are allocated monthly.

Service Department expenses are allocated to producing departments as follows:Expenses Fabricating Finishing Building Maintenance Tk. 30,000.00 Tk. 15,000.00 Timekeeping and Personnel Tk. 16,500.00 Tk. 11,000.00 Others Tk. 19,500.00 Tk. 19,500.00

Materials inventory and work in process are costed on a FIFO basis.

The Fabricating Departments records for December show:Particulars Units In process, December 1 3,000 Started in process 25,000 Total units to be accounted for 28,000

Transferred to Finishing Department 19,000 In process, December 31 6,000 Normal Losses throughout the process 3,000 Total units accounted for 28,000

Particulars Amount in Taka

Work in process, December 1 13,000 Material 17,500 Labor 21,500 Factory Overhead 52,000 Current period costs: Direct Labor Cost 154,000 Departmental Factory Overhead (excluding service departmentallocation)

132,000


39/58Page 2 of 5

CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-IIISUBJECT: 302. ADVANCED COST ACCOUNTING

Q. No. 1.(contd)

Polyplast work-in -process at the beginning and end of the month was partially completed asfollows:

Particulars Materials Labor and FactoryOverhead

December 01 66% 50% December 31 100% 75%

Material inventory records for December indicate:

Particulars Miracle Mix Bypro Quantity (unit) Amount (Taka) Quantity (unit) Amount (Taka)

Balance, December 01 62,000 62,000.00 265,000 18,550.00 Purchase: December 12 39,500 49,375.00 December 20 28,500 34,200.00 Fabricating Departmentusage

83,200 50,000

Requirement:(1) Compute the equivalent number of units of Polyplast for materials and conversion costs.(2) (i) Determine the total Fabricating Department cost to be accounted for.

(ii) Compute the unit costs of materials, labor and factory overhead for the Fabricatingdepartment.(iii) Compute the cost transferred to the Finishing Department, and the cost of ending

work in process inventory in the Fabricating Department.(3) Complete requirements (1) and (2) above assuming that work in process inventory is

costed using the average method. (Round unit costs to the nearest Taka)

[Marks: {5+ (5+7+8)} = 25]Q. No. 2.(a) Companies should always make and sell all products whose selling prices exceeded

variable cost. Do you agree with the statement? Explain.(b) The Ottobi India manufactures filling small cabinets in two operations: Machining and

finishing. It provides the following information:Machining

Annual Capacity Finishing

100,000 units 80,000 units Annual Production 80,000 80,000 Fixed Operating Costs Tk. 64,00,000 Tk. 40,00,000 Fixed Operating Cost per unit produced Tk. 80 per unit Tk. 50 per unit

Each Cabinet Sell for Tk. 720 and has direct material cost of Tk. 320 incurred at the startof the machining operation Ottobi has no other variable costs. Ottobi can sell whateveroutput it produces.Required:(i) Ottobi is considering using some modern Jigs and Tools in the finishing operation

that would increases annual output by 1,000 units. The annual cost of these Jigs andtools is Tk. 3,00,000. Should Ottobi acquire these tools? Show with Calculation.


40/58Page 3 of 5


Q. No. 2.(contd)

(ii) The Production Manager of the machining department has submitted a proposal todo faster setups that would increase the annual capacity of the machiningdepartment by 10,000 units and would cost Tk. 50,000 per year. Should Ottobiimplement the change?

(iii) An outside contractor offers to do the finishing operation for 12,000 units at Tk. 100per unit that is the double of Tk. 50 per unit that it costs Ottobi to do the finishing inhouse. Should the Ottobi accept the subcontractors offer?

(iv) The Mumbai Corporation offers to machine 4,000 units at Tk. 40 per unit that is thehalf of Tk. 80 per unit that it costs Ottobi to do the machining in house. Should Ottobiaccept Mumbai Corporations offer?

(c) Vision Enterprises manufactures converter boxes for high definition TVs. All processing isinitiated when an order is received. For March there were no beginning inventories.Conversion Costs and Direct Materials are the only manufacturing cost accounts. DirectMaterials are purchased under a just-in-time system. Back-flush costing is used with afinished goods trigger point. Additional information is as follows:

Actual conversion costs Tk. 435,000 Standard materials costs per unit Tk. 115 Standard conversion cost per unit Tk. 85 Units produced 7,900 Units sold 7,600

Required: Record all Journal entries for the monthly activities related to the above transactions if

back-flush costing is used.[Marks: (5+12+8) = 25]

Q. No. 3.(a) Define Scraps, Wastage, Spoilage and Defectives and state how they are treated in Cost

Accounting?(b) Eastern Refinery produces Gasoline Heating Oil and Jet Fuel from Crude Oil which is

processed in Department-A. At the end of the process in Department-A, three partiallycompleted products emerge: Gasoline, Heating Oil and Jet Fuel. These three productslater are being processed in Department-B, C and D respectively for refinement. Thefollowing data relates to the production of these goods during a particular period:

Department Input and output Cost Incurred Disposable cost Price per gallon (In Gallon) Tk. Tk. Tk.

A (Crude Oil) 3,28,000 8,20,000 - - B (Gasoline) 2,80,000 1,00,000 8,000 2.30 C (Heating Oil) 3,40,000 60,000 2,000 2.00 D (Jet Fuel) 2,00,000 70,000 2.80 10,000

8,20,000 5,58,000 20,000 Required:(i) A statement showing the allocation of Joint Cost applying NRV method.


41/58Page 4 of 5

(ii) Statement showing total cost of production of each product and profit earned on eachproduct assuming all units are sold out.


Q. No. 3.(contd)(c) The Chittagong Timber Company prepares lumber for companies who manufacture

furniture. The main product is finished lumber with a byproduct of wood shavings. Thebyproduct is sold to plywood manufacturers. For July, the manufacturing process incurredTk. 332,000 in total costs. Eighty thousand board feet of lumber were produced and soldalong with 6,800 pounds of shavings. The finished lumber sold for Tk. 6.00 per board footand the shavings sold for Tk. 0.60 a pound. There were no beginning and endinginventory of lumber. However, 1,800 pounds of shavings remain unsold at the end of themonth.

Required:Prepare an income statement showing the byproduct (a) as a cost reduction during production,and (b) as a revenue item when sold. Put comments on any differences between the margin

under two methods.[Marks: (5+12+8) = 25]

Q. No. 4.(a) Lexington Company manufactures stone tiles for kitchen counters and floors. Its strategy

is to manufacture high quality products at reasonable prices and to rapidly deliver productsfollowing sales.Lexington sells to both hardware store and contractors. To avoid holding large inventoriesof finished goods, Lexington manufactures products based on orders from customers. Thefactory set up enables workers to perform multiple functions, including receiving orders,running different machines, inspecting for quality, packaging, and shipping the finalproduct.Given Lexingtons strategy, describe the financial and nonfinancial measures that you

would include in its balanced scorecard-based management control system.

(b) The marketing department at Barnic Manufacturing has an idea for a new product that isexpected to have a life cycle of 5 years. After conducting market research, the companyhas determined that the product could sell for Tk. 250 per unit in the first 3 years of life andTk. 175 per unit for the last 2 years. Units expected to sale are as follows:

Year 1 Year 2 Year 3 Year 4 Year 5

3,000 units 4,500 units 4,800 units 5,000 units 1,500 units

Per unit variable selling cost are estimated at Tk. 30 through the products life, annual

fixed selling and administrative costs are expected to be Tk. 3,50,000. BernicManufacturing desires a profit margin of 20% of selling price per unit.Requirement:(i) Complete the life cycle target cost to manufacture the product.(ii) If the company expects the product to cost Tk. 65 to manufacture in the first year what is

the maximum manufacturing cost can be in the following 4 years.(iii) Assume Bernic Manufacturing engineers conclude that the expected manufacturing cost

per unit is Tk. 70. What action might the company take to reduce this cost?[Marks: (10 + 15) = 25 ]


42/58Page 5 of 5

= THE END =


43/58Page 1 of 2


PROFESSIONAL LEVEL-IIISUBJECT: 303. CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES.

Time: Three Hours Full Marks:100 Answer SIX questions taking any THREE from each part, including compulsory question

No. 5 and 10. Answer must be brief, relevant, neat and clean. Use a fresh sheet for answering each question. Start answering each question from a fresh sheet

PART-A: CORPORATE LAWS

Q. No. 1.(a) Who are the signatories of Memorandum and Articles of Association of a Public Limited

Company (PLC)? How these two documents can be amended, if required?(b) A Public Limited Company decided to raise its capital. Discuss the procedures to be taken in this

respect.[Marks: (7+8) = 15]

Q. No. 2.(a) What are the restrictions imposed on the borrowing powers of the Board of Directors?(b) Briefly mention the provisions of the Companies Act 1994 relating to the appointment and re-

appointment of Statutory Auditors.

[Marks: (7+8) = 15]Q. No. 3.(a) Who are considered to be related party? What disclosures are required in the Annual Report of

a listed company regarding related party transactions?(b) Recently Bangladesh Securities Exchange Commission (BSEC) has made mandatory holding

of at least two percent shares of paid up capital by each of the sponsor director of a listed

company. Explain its merits and demerits. Do you think it will have a positive impact in thestock exchanges of Bangladesh?[Marks: (8+7) = 15]

Q. No. 4.

(a) A company is an artificial person created by law with a perpetual succession and a common seal.Explain this statement and point out the basic features of a company registered with RJSC.

(b) A companys object clause is of fundamental importance not only to members but also to non-members. Explain this statement.

[Marks: (8+7) = 15]Q. No. 5.

Write short notes on the following:(a) Price sensitive information;(b) Prospectus;(c) Annual General Meeting;(d) Casual Vacancy of a Director;(e) Appointment of an Independent Director .

[Marks: (5 X 4) = 20]


44/58Page 2 of 2

CMA AUGUST 2013, EXAMINATIONPROFESSIONAL LEVEL-IIISUBJECT: 303. CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES.

PART-B: GOVERNANCE & SECRETARIAL PRACTICES

Q. No. 6.(a) A Company Secretary is an eye witness to the Board. Do you agree with the statement? Explain in

details.(b) Discuss the role of a Company Secretary in Corporate Governance.

[Marks: (7+8) =15]

Q. No. 7.(a) What are the procedures to offer right shares of a public limited company?(b) How the interest of small investors can be protected in the share market?

[Marks: (8+7) =15]Q. No. 8.

(a) What do you mean by share market index?(b) Explain the procedures for calculating Index.(c) What are the factors responsible for declining share prices?

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

Q. No. 9.(a) Draft a notice for the forthcoming Annual General Meeting of a Public Limited Company with

common agendas.(b) What are the provisions that have to be complied in carrying out Cost Audit in a large Textile

Industry?[Marks: (7+8) =15]

Q. No. 10

Write Short notes on the following:(a) Quorum for a meeting;(b) Record date;(c) Proxy; (d) Insider Trading;(e) CDBL.

[Marks: (5 x 4) = 20]

= THE END =


45/58Page 1 of 2


PROFESSIONAL LEVEL-IIISUBJECT: 304. AUDITING.

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.(a) Explain the concept of assurance and briefly describe the reasonable assurance and

limited assurance engagement.(b) Who may act as an auditor of a company? Who may appoint and fixed up remuneration of

auditor? Write briefly mentioning related section of Companies act 1994.(c) What are the statutory duties and responsibilities of the auditor?(d) Define internal control system? Who is responsible for implementation of IC system? If IC

are effective then it can reduce the risk of auditor Explain.[Marks: (4+4+3+4) = 15]

Q.

Documents

CMA Question August-2013