CSS Accounting and Auditing Past Paper 2020

Instructions specific to this paper

• Attempt ONLY FOUR questions from PART-II by selecting TWO questions from EACH SECTION.
• Use of Calculator is allowed.
• First supply the missing data in the table above. Then comment on the relative performance of each

Questions

1. Q. 2

   No. Debits No. Credits 101 Cash Rs. 4,880 154 Accumulated Depreciation Rs. 1,500 112 Accounts Receivable 3,520 201 Accounts Payable 3,400 126 Supplies 2,000 209 Unearned Service Revenue 1,400 153 Store Equipment 15,000 212 Salaries Payable 500 311 Common Stock 15,000 320 Retained Earnings 3,600 Rs.25,400 Rs.25,400 During September the following summary transactions were completed. Sept. 8 PaidRs.1,400 for salaries due employees, of which Rs.900 is for September. 10 Received Rs.1,200 cash from customers on account. 12 Received Rs.3,400 cash for services performed in September. 15 Purchased store equipment on account Rs.3,000. 17 Purchased supplies on account Rs.1,200. 20 Paid creditors Rs.4,500 on account. 22 Paid September rent Rs.500. 25 Paid salaries Rs.1,250. 27 Performed services on account and billed customers for services provided Rs.1,500. 29 Received Rs.650 from customers for future service. Adjustment data consist of: Supplies on hand Rs.1,200. Accrued salaries payable Rs.400. Depreciation is Rs.100 per month. Unearned service revenue of Rs.1,450 is earned. Required (a) Journalize the September transactions. Prepare a trial balance at September 30. (b) Journalize and post adjusting entries. Prepare an adjusted trial balance. (c) Prepare an income statement and a retained earnings statement for September and a balance sheet at September 30.

2. Q. 310 marks

   (A) Industry A has three companies whose income statements and balance sheets are summarized below. Company X Company Y Company Z Sales Rs. 500,000 (d ) (g) Net income Rs. 25,000 Rs.30,000 (h) Total assets Rs. 100,000 (e) Rs.250,000 Total asset turnover (a) (f) 0.4 Profit margin (b) 0.4% 5% Return on total assets (ROA) (c) 2% (i) First supply the missing data in the table above. Then comment on the relative performance of each company. (B) The Rivers Company reports the following data relative to accounts receivable: (10) (20) 20X8 20X9 Average accounts receivable Rs. 400,000 Rs. 416,000 Net credit sales Rs. 2,600,000 Rs. 3,100,000 The terms of sale are net 30 days. (a) Compute the accounts receivable turn over and the collection period, and (b) Evaluate the results.

3. Q. 610 marks

   (A) Sodius Chemical Inc. placed 220,000 liters of direct materials into the mixing process. At the end of the month, 5,000 liters were still in process, 30% converted as to labor and factory overhead. All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process. Sodius uses weighted-average costing. Required: (a) Determine the equivalent units in process for direct materials and conversion costs, assuming there was no beginning inventory. (b) Determine the equivalent units in process for direct materials and conversion costs, assuming that 12,000 liters of chemicals were 40% complete prior to the addition of the 220,000 liters. (B) Asghar Manufacturing Company sells its products for Rs.33 each. The current production level (10) (20) is 50,000 units, although only 40,000 units are anticipated to be sold. Unit manufacturing costs are: Direct materials Rs. 6.00 Direct manufacturing labor Rs. 9.00 Variable manufacturing costs Rs. 4.50 Total fixed manufacturing costs Rs.180,000 Marketing expensesRs.3.00 per unit, plus Rs.100,000 per year Required: (a) Prepare an income statement using absorption costing. (b) Prepare an income statement using variable costing.

4. Q. 710 marks

   (A) Big Mind Corporation was recently formed to produce a semiconductor chip that forms an essential part of the personal computer manufactured by a major corporation. The direct materials are added at the start of the production process while conversion costs are added uniformly throughout the production process. June is Big Mind's first month of operations, and therefore, there was no beginning inventory. Direct materials cost for the month totaled Rs.950,000, while conversion costs equaled Rs.4,625,000. Accounting records indicate that 475,000 chips were started in June and 425,000 chips were completed. Ending inventory was 50% complete as to conversion costs. Required: (a) What is the total manufacturing cost per chip for June? (b) Allocate the total costs between the completed chips and the chips in ending inventory. (B) The following information was gathered for Smart-view Company for the year ended (10) (20) December 31, 2018: Budgeted Actual Direct labor-hours 75,000 dlh 80,000 dlh Factory overhead Rs.600,000 Rs.625,000 Assume that direct labor-hours are the cost-allocation base. Required: (a) Compute the budgeted factory overhead rate. (b) Compute the factory overhead applied. (c) Compute the amount of over/under applied overhead.

Standard FPSC instructions

Printed on this and every CSS paper.

• Part-II is to be attempted on the separate Answer Book.
• All the parts (if any) of each question must be attempted at one place instead of at different places.
• Write Q. No. in the Answer Book in accordance with Q. No. in the question paper.
• No page/space be left blank between the answers. All the blank pages of the Answer Book must be crossed.
• Extra attempt of any question or any part of the attempted question will not be considered.