ICMAB question april 2013 All level All Questions

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL-2013 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 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.
(a) Keanu Reeves started the ‘Reeves Repair Shop’ on 1st
May, 2012 introducing Tk. 950,000
capital. His capital consist Tk. 200,000 cash, and equipment worth Tk. 750,000. On May, he
completed the following transactions:
May02: Paid Tk. 10,000 cash for store rent for the month of May.
03: Purchase equipment for Tk. 120,000 from Lorence Auto Parts Ltd., paying 40%
cash and signing a 6-month, 12% note payable for the remaining balance.
05: Paid Tk. 12,000 for one year accident insurance policy.
08: Receive bill from the daily news for advertising the opening of the repair shop Tk.
3,600.
12: Provide repair service to Hi-Fi Electronics Tk. 60,000. (60% cash and 40% on
account).
15: Hire a secretary at a salary of Tk. 1,000 per month who will work from next
month.
17: Made a contract with a client for service to be provided on June and collect Tk.
35,000 cash.
22: Collect 40% of balance due from Hi-Fi Electronics.
26: Paid Tk. 1,400 on account for advertisement incurred on May 08.
Required:
Show the effect of above transactions in accounting equation. The column headings should
be: Cash + Equipment + Account Receivables + Prepaid Insurance = Accounts Payable +
12% Notes Payable + Unearned Revenue + Reeves’s Capital
(b) Consider the following situations involve accounting principles and assumptions:
(i) Asmita Enterprise owns buildings that are worth substantially more than they originally
cost. In an effort to provide more relevant information, Asmita Enterprise reports the
buildings at market value in its accounting report.
(ii) Susan & Sons includes in its accounting records only transaction data that can be
expressed in terms of money.
(iii) Runin, sole proprietor of H & S Corporation, records her personal living costs as
expenses of the corporation.
Required:
Identify and explain which principle or assumption has been violated (or supported) in each of
the three situations listed above.
(c) Hulk’s Bay accepted an engagement in January performs the work in February and is paid in
April. If Hulk’s Bay prepares monthly financial statements, when should it recognize revenue
from this engagement? Why?
[Marks: (10+6+4) = 20]
Q. No. 2.
(a) Amos Company assigned a Tk. 100,000 residual value to a machine that cost Tk. 900,000 and
was depreciated over an eight-year life. At the end of the ninth year, assuming the machine is
not sold or scrapped, what amounts, if any, will appear on the balance sheet? Explain your
reasoning.

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CMA APRIL, 2013 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 001. PRINCIPLES OF ACCOUNTING
Q. No. 2. (Contd….)
(b) On January 1, 2011, CANTON Company had Accounts Receivable Tk. 27,100 and Allowance
for Doubtful Accounts Tk. 2,350. CANTON Company prepares financial statements annually.
During the year the following selected transactions occurred.
Jan. 5 : Sold Tk. 3,000 of merchandises to Goppy Brooks Company, terms n/30.
Feb. 2 : Accepted a Tk. 3,000, 4-month, 12% promissory note from Goopy Brooks
Company for balance due.
Feb. 12 : Sold Tk. 3,600 for merchandise to Goni Company and accepted Goni's Tk. 3,600
two-month.10% note for balance due.
Feb. 26 : Sold Tk. 2,500 of merchandise to Matin Co. terms n/10.
April. 5 : Accepted a Tk. 2,500, 3- month, 8% note from Matin Co, for balance due.
April. 12 : Collected Goni Company note in full.
June. 2 : Collected Goppy Brooks Company note in full.
July. 5 : Matin Co. dishonors its note of April 5. It is expected that Matin will eventually
pay the amount owed.
July. 15 : sold Tk. 1,500 of merchandise to Treet Inc. and accepted Treet's Tk. 1,500,
3-month, 12% note for the amount due.
Oct. 15 : The Treet Inc. note was dishonored. Treet Inc. is bankrupt, and there is no hope
of future settlement.
Required: Journalize the transactions.
[Marks: (5+15) = 20]
Q. No. 3.
(a) Ulfat Enterprise received a Tk. 24,000, 60 – day, 10% note dated December 1 from Alfaz
Enterprise. Ulfat’s accounting period ends on December 31 every year. Answer the following
required questions for Ulfat Enterprise.
Required:
(i) Journalize the adjusting entry for accrued interest on December 31.
(ii) Journalize if the note is honored on the maturity date.
(b) You are provided with the following information for CRIPSON Inc. for the month ended June
30, 2012, CRIPSON uses the periodic method for inventory.
Date Description Quantity Unit cost or Selling Price
June 1 Beginning Inventory 25 Tk.30
4 Purchases 85 Tk.32
10 Sales 70 Tk.45
11 Sales return 10 Tk.45
18 Purchases 35 Tk.34
18 Purchase return 5 Tk.34
25 Sales 50 Tk.42.50
28 Purchase 20 Tk.36
Required: Calculate (1) ending inventory, (2) Cost of goods sold, (3) Gross profit and
(4) Gross profit rate under each of the following method:
(i) LIFO (ii) FIFO (iii) Average Cost.
[Marks: (5+15) = 20]
Q. No. 4.
(a) Mr. Rahman is the sole proprietor of a small business. He is planning to borrow some money
for his business which requires submitting financial statements. Rahman kept records of all his
business transaction properly. But when he was preparing his balance sheet he became quite
confused about what should be the balance of cash at bank. Balance as per the cash book is
Tk. 150,750 whereas, the bank statement showed balance of Tk. 78,525. Suggest Mr.
Rahman regarding the mentioned issue.

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CMA APRIL, 2013 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 001. PRINCIPLES OF ACCOUNTING
Q. No. 4. (Contd….)
(b) The cashbook of Y Ltd. showed a balance of Tk. 41,004 on 31st December 2011. It received
the bank statement from The City Bank Ltd. in the first week of January 2012. The balance
shown by the statement is Tk. 44,380 on 31st December 2011. The following data were
available for recording the statement:
(i) The bank charges Tk. 76, which was not yet recorded by the company.
(ii) The company mailed a deposit of Tk. 7,000 on December but not appeared on the bank
statement.
(iii) Cheques issued in December but not charged to the December bank statement.
Cheque No : 007 Tk. 300
008 8,000
009 62
010 1,640
(iv) The company has not yet recorded the interest of Tk. 1,200 collected by the bank in
December.
(v) The bank returned one of our customer’s cheques of Tk. 400 with the bank statement
and marked it as ‘NSF’. The bank recorded it as a payment from the bank balance.
(vi) The company identified that it incorrectly recorded it as a payment of Tk. 262 to an
account as payable as Tk. 622.
(vii) A cheque for P Company in the amount of Tk. 710 that had been incorrectly charged to
Q Company by the bank.
Required: Prepare a bank reconciliation statement as on 31st December 2011.
[Marks: (5+15) = 20]
Q. No. 5.
The following was the Balance Sheet of A,B and C sharing profits and Losses in the proportion of
6
/14,5
/14 and 3
/14 respectively:-
A, B and C
Balance Sheet
Liabilities & Equity Amount (Taka) Assets Amount (Taka)
Creditors 37,800 Land and Building 1,00,800
Bills Payable 12,600 Furniture 14,700
Reserve 14,000 Stock 58,800
Capital: A: 79,800 Debtor 52,920
B: 67,200 Cash at Bank 17,780
C: 33,600 1,80,600
2,45,000 2,45,000
They agreed to take 'D' in to partnership and give him 1
/8 share of profits on the following terms:
1. That 'D' brings in Tk. 32,000 as his capital.
2. That Furniture be written down by Tk. 1,840 and stock be depreciated by 10%.
3. That provision of Tk. 2,640 be made for outstanding repair bills.
4. That the value of Land and Building be written up to Tk. 1,30,200.
5. That the value of goodwill be fixed at Tk. 17,640.
6. That the capitals of A, B and C be adjusted on the basis of D,s capitals by opening current
accounts.
Required: Give the necessary journal entries and the Balance Sheet of the firm as newly
constituted.
[Marks: 20]
=THE END=

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CMA APRIL 2013, EXAMINATION
FOUNDATION LEVEL
SUBJECT: 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) Why do we write reports? Discuss.
(b) List and explain the main factors to be considered while writing a report.
(c) Your CEO is planning to hire an Accountant for the company. You are required to draft an
advertisement to be published in the local daily newspaper.
[Marks: (4+6+5) = 15]
Q. No. 2.
(a) Define non-verbal communication.
(b) “A speaker must read the reaction of his/her audience correctly” – Examine the statement
giving example of various types of audience cues.
(c) “A well written business letter is a way to create goodwill between the writer and the
receiver” – Justify.
[Marks: (4+6+5) = 15]
Q. No.3.
(a) Suppose that in response to an advertisement recently published in THE DAILY STAR,
you are interested to apply for the post of Secretary of XYZ Company. Draft the
application.
(b) Write a letter on behalf of the HR Manager of the above company inviting you for an
interview for the above post.
(c) Suppose that you have been selected for the above post. Draft an appointment letter to be
issued to you on behalf of the HR Manager of the company.
[Marks: (6+4+5) = 15]
Q. No. 4.
Write short notes on any FIVE of the following:
(a) Internet;
(b) Asset Management Company;
(c) Brokers & Dealers;
(d) Online Banking;
(e) Foreign remittance;
(f) NBFI;
(g) NGO;
(h) Registrar of Joint Stock Companies;
(i) WTO.
[Marks: (5x4) = 20]

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FOUNDATION LEVEL
SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT.
GROUP – B : OFFICE MANAGEMENT
Q. No. 5.
(a) What do you mean by selection of office location?
(b) What are the factors to be considered in selecting an office building site?
(c) Discuss the effects of the office environment on employees.
[Marks: (3+6+6) = 15]
Q. No. 6.
(a) How does a modern office differ from a traditional office?
(b) State the major functions of office management.
(c) Explain the effects of office automation on the performance of employees.
[Marks: (5+5+5) = 15]
Q. No. 7.
(a) Briefly describe the steps involved in the process of selecting office employees.
(b) What factors should you consider in designing an appropriate training program for the
office employees?
(c) Explain, in brief, any two of the available methods for appraising the performance of office
employees.
[Marks: (5+5+5) = 15]
Q. No. 8.
Write short notes on any FIVE from the following.
(a) Indexing;
(b) Disposition of records;
(c) Electronic filing;
(d) Office manual;
(e) Fringe benefits;
(f) Work measurement;
(g) Organization structure;
(h) Office ethics.
[Marks: (5x4) = 20]
==THE END==

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CMA APRIL – 2013 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 003. QUANTITATIVE TECHNIQUES.
Time : Three hours Full Marks: 100
Answer any TEN questions, FIVE from each Part.
All questions carry equal marks.
Start answering each question from a fresh sheet.
PART–A: BUSINESS MATHEMATICS
Q. No. 1.
(a) Define a power set. Find the power set P(S) of the set S = {a, b, c}.
(b) In a class of 25 students, 12 students have taken Mathematics; 8 have taken Mathematics
but not Economics. Find the number of students who have taken Mathematics and
Economics and those who have taken Economics but not Mathematics. Display in Venn
diagram.
[Marks: (4 + 6) = 10]
Q. No. 2.
(a) If Tk. 1,000 is deposited in an account at the end of every quarter for the next 10 years,
how much will be in the account at the time of the final deposit if interest is 10%
compounded quarterly?
(b) Find the compound interest on Tk. 10,00,000 for 5 years if interest is payable half-yearly,
the rate for the first two years being 8% p.a. and for the next 3 years 10% p.a.
[Marks: (5 + 5) = 10]
Q. No. 3.
(a) Prove that
θ
θ
tan1
cos
−
+
θ
θ
cot1
sin
−
= √2 sin( θ
π
+
4
).
(b) A firm invests Tk. 10,000 in a business which has a net return of Tk. 500 per year. An
investment of Tk. 20,000 would yield an income of Tk. 2,000 per year. What is the linear
relationship between investment and annual income? What would be the annual return on
an investment of Tk. 12,000?
[Marks: (5 + 5) = 10]
Q. No. 4.
(a) If f(x)= 2x 2
3
(√x + 2) (√x-1), find )(xf ′ .
(b) Find (i) ∫ 32
3
)1( +x
x
dx ; (ii) ∫
Π
0
2/
( x
eΠ
+sinx) dx
[Marks: (4 + 6) = 10]
Q. No. 5.
(a) In a mercantile firm 4 posts fall vacant and 25 candidates apply for the posts. In how many
ways can a selection be made :
(i) If one particular candidate is always included?
(ii) If one particular candidates is always excluded?
(b) If xy
= ex-y
; Prove that
dx
dy
= 2
)log1(
log
x
x
+
[Marks: (5 + 5) = 10]

of 3
FOUNDATION LEVEL
SUBJECT: 003. QUANTITATIVE TECHNIQUES
Q. No. 6.
A manufacture has a fixed cost of Tk. 1,20,000 and variable cost of Tk. 20 per unit made and
sold. Selling price per unit is Tk. 50.
Required:
(a) Write revenue and cost equations using c for cost and q for number of units.
(b) Compute profit if 10,000 units are made and sold.
(c) Find the break-even quantity.
(d) Find the break-even volume of sales.
(e) Construct the break-even chart, labeling all the characteristics.
[Marks: (5 x 2) = 10]
Q. No. 7.
(a) Solve the following system of equations by matrix method:
5x – 6y + 4z = 15
7x + 4y – 3z = 19
2x + y + 6z = 46
(b) The production function of a commodity is given Q = 40F + 30F2
-
3
3
F
, where Q is the
total output and F is the units of input.
Required:
(i) Find the number of units of input required to give maximum output.
(ii) Find the maximum value of marginal product.
(iii) Verify that when the average product is maximum, it is equal to marginal product.
[Marks: (5 + 5) = 10]
PART – B : BUSINESS STATISTICS
Q. No. 1.
a) Distinguish between Primary and Secondary Data. Outline some sources of secondary
data in Bangladesh.
b) The accompanying table shows the weights in kg of 40 students:
54 56 56 59 60 62 62 66 67 68
68 70 70 73 73 73 75 77 78 79
79 81 78 68 63 53 50 56 52 58
59 58 68 60 61 63 60 54 65 68
Construct a frequency distribution taking appropriate class interval.
[Marks: (4+6) = 10]
Q. No. 2.
a) Define Central Tendency. What are its usual measures? Discuss them in brief.
b) The following table shows the age of some people living in a locality.
Age (in Years) 0 – 9 10 – 19 20 – 29 30 – 39 40 – 49 50 – 59 60 – 69
No. of People 17 22 13 21 18 7 3
Calculate mean, median and mode of the data. Locate 3rd
quartile by the graph.
[Marks: (4+6) = 10]

of 3
FOUNDATION LEVEL
SUBJECT: 003. QUANTITATIVE TECHNIQUES
Q. No. 3.
a) What are different measures of variation? Why standard deviation is considered to be the
best measure?
b) Draw an ogive curve for the following distribution and hence calculate the number of
workers earned monthly wages below Tk.3800.
Monthly Wages
(in Tk.)
2000–2500 2500–3000 3000–3500 3500–4000 4000- 4500
No. of Workers 6 10 22 30 16
[Marks: (4+6) = 10]
Q. No. 4.
a) Define correlation and regression analysis? What is scatter diagram? Explain the following
values of ‘r’ with the help of diagrams: (i) r = 0; (ii) r = - 1; (iii) r = +1.
b) A study was made on the amount of converted sugar in a certain process at various
temperatures. The data were recorded as follows:
Temperature(x) 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0
Converted Sugar(y) 8.1 7.8 8.5 9.8 9.5 8.9 8.6 10.2 9.3 9.2 9.9
i) Draw a scatter diagram.
(ii) Determine the coefficient of correlation.
iii) Interpret the strength of the correlation coefficient.
iv) Determine the coefficient of determination and interpret.
[Marks: (4+6) = 10]
Q. No. 5.
a) Define probability of an event. State the elementary properties of probability. Prove the
additive law of probability.
b) Define mutually exclusive events and independent events. Two dice are tossed. Show the
sample space. ‘A’ be the event that both dice show same number and ‘B’ be event that the
sum of the scores of two dices is more than 9. Check whether the events A and B are
mutually exclusive or independent.
[Marks: (4+6) = 10]
Q. No. 6.
a) Define normal distribution with their important properties. What type of errors are
committed in testing hypothesis? What about the power of the test?
b) The Thompson’s Discount Appliance Store issues its own credit card. The credit manager
wants to find whether the mean monthly uppaid balance is more than Tk.400. The level of
significance is set at 0.05. A random check of 172 unpaid balance revealed the sample
mean is Tk. 407 and the standard deviation of the sample is Tk. 38. Should the credit
manager conclude the population mean is greater than Tk. 400?
[Marks: (5+5) = 10]
Q. No. 7.
a) What do you mean by survey? Define census and sample survey with examples. Discuss
the advantages of a sample survey over census.
b) Define the following terms with example:
Null hypothesis, Simple hypothesis, Composite hypothesis, Parametric hypothesis,
Type-I error.
[Marks: (5+5) = 10]
= THE END =

of 2
FOUNDATION LEVEL
SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS.
Answer FIVE questions, taking at least TWO from each group “A” and “B”.
Show computations where necessary.
GROUP – A : BUSINESS ECONOMICS
Q. No. 1.
(a) Describe how price is determined in a Perfectly Competitive market.
(b) Distinguish between (i) Economies of scope and Economies of scale (ii) Private
investment and Public investment.
(c) When 100 units of output are produced, the average cost of production (AC) is Tk. 300. If
average cost of production (AC) increases to Tk. 400 with an increase in output by one
unit, what is the marginal cost of producing the 101st unit?
[Marks: (8+6+6) = 20]
Q. No. 2.
(a) “Public-Private Partnership (PPP) investment policy is beneficial for Bangladesh
economy”. Do you support this statement? Explain.
(b) State the conditions of Total Product (TP), Average Product (AP) and Marginal Product
(MP) under different stages of Law of Variable Proportion.
(c) Calculate GDP and National Income from the following data:
(Tk. In crores)
Net domestic product 12,433
Depreciation 1,832
Net foreign factor income 133
Statistical discrepancy 136
Indirect business taxes 983
Corporate profits 1,477
Interest and miscellaneous payments 778
Social security taxes 996
Transfer payments 1,869
Capital income 2,038
Personal taxes 1,461
[Marks: (8+5+7) = 20]
Q. No. 3.
(a) Define Managerial Economics.
(b) Illustrate key ways in which Managerial Economics help in Managerial Decision-making.
(c) Distinguish between (i) Free Goods and Economic Goods (ii) Public goods and Private
goods.
[Marks: (5+10+5) = 20]
Q. No. 4.
(a) Distinguish between Revenue and Development budget in the context of Bangladesh
Government. What are the sources of revenue in the government’s budget?
(b) What is Deficit Financing? What are its relative advantages and disadvantages?
[Marks: (10+10) = 20]

of 2
FOUNDATION LEVEL
SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS.
Q. No. 5.
(a) How is equilibrium price determined in the market?
(b) What is elasticity of demand? Discuss the factors that determine elasticity of demand.
(c) Calculate price elasticity, income elasticity and cross elasticity from the following figures of
a firm selling product X:
Years Sales in quantity
of X (no. of units)
Price per unit of
X in Taka
Price per unit of
Y in Taka
Per capita
income in Taka
2002 50,000 50 20 20,000
2012 80,000 30 25 30,000
[Marks: (4+6+10) = 20]
GROUP – B : INTERNATIONAL BUSINESS
Q. No. 6.
(a) Describe the factors influencing International Business.
(b) Illustrate the impacts of Exchange Rate changes in Importing to and Exporting from
Bangladesh.
(c) Explain why International Tax Conflict arises and how to resolve it.
[Marks: (7+6+7) = 20]
Q. No. 7.
(a) Explain the salient barriers faced by Bangladeshi Traders in Import and Export Business.
(b) Discuss the important features of the different stages of International Product life Cycle.
(c) Distinguish between Country-based theory and Firm-based theory.
[Marks: (8+7+5) = 20]
Q. No. 8.
Write short notes on any FIVE of the following:
(a) Multinational Corporation (MNC);
(b) Disguised unemployment;
(c) Trade facilitation;
(d) Transfer Income;
(e) WTO;
(f) Board of Investment (BOI);
(g) Non-Tariff Barriers;
(h) Back to back letter of credit.
[Marks: (5 x 4) = 20]
==THE END==

of 5
PROFESSIONAL LEVEL-I
SUBJECT: 101.INTERMEDIATE FINANCIAL ACCOUNTING.
All questions are to be attempted.
Show computations, where necessary.
Q. No. 1.
During the financial year 2012, Muttakeen Limited had the following transactions:
(i) On 1st
January 2012 Muttakeen Limited purchased new asset of Farhana PLC for Tk. 720,000.
The face value of Farhana PLC’s identifiable net assets was Tk. 344,000. Muttakeen Limited is
of the view that due to popularity of Farhana PLC’s products, the life of resulting goodwill is
unlimited.
(ii) On the February 2012, Muttakeen Limited, purchased a lease license to operate toll collection
service of Bhadursha Park from the Dhaka City Corporation for Tk. 120,000 and at an annual
fee of 1% of collecting revenue. The lease license expires after 5 years. Collecting revenues
were Tk. 40,000 during financial year 2012. Muttakeen Limited projects future revenue of Tk.
80,000 in 2013 and Tk. 120,000 per annum for 3 years thereafter.
(iii) On 5th
April 2012, Muttakeen Limited was granted a patent that had been applied for by
Farhana PLC. During 2012, Muttakeen Limited incurred legal costs of Tk. 102,000 to register
the patent and an additional Tk.170,000 to successfully prosecute a patent infringement suit
against a competitor. Muttakeen Limited expects the patents economic life to be 10 years.
Muttakeen Limited follows an accounting policy to amortize all intangibles on straight line basis
over the maximum period permitted by accounting standard taking a full year amortization in
the year of acquisition.
Required:
(a) Prepare a schedule showing the intangible section as per BAS in Muttakeen Limited
Statement of Financial Position at 31st
December 2012.
(b) Prepare a schedule showing the related expenses that would appear in the Statement of
Comprehensive Income of Muttakeen Limites for 2012.
(c) “One of the characteristics of financial statements is neutrality”- Do you agree with this
statement?
(d) What is Off Balance Sheet Items?
(e) What do you mean by ‘Post balance sheet events’? Explain.
[Marks: {(8+6)+2+2+2} = 20]
Q. No. 2.
(a) As per IAS -7 Para 10, Cash Flows must be analysed between operating, investing and
financing activities. Being a professional accountant how you will explain operating, investing
and financing activities?
(b) Balance Sheet of 3M Limited is given below:
3M Limited
Balance Sheet
As at
Liabilities
31.12.2011
(Tk.)
31.12.2012
(Tk.)
Share Capital ( 50,000 shares @ Tk. 10/- each) 500,000 500,000
9% Debentures 200,000 160,000
Sundry creditors 230,000 216,000
Profit and Loss A/c 40,000 54,000
Depreciation fund 80,000 88,000
Contingency reserve 140,000 110,000
Outstanding expenses 30,000 48,000
12,20,000 11,76,000

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Q. No. 2. (Contd…..)
Assets
Land & building 300,000 300,000
Machinery 164,000 180,000
Stock-in-trade 200,000 228,000
Sundry debtors 170,000 162,000
Cash & bank balances 120,000 110,000
Current Investment 262,000 190,000
Prepaid expenses 4,000 6,000
12,20,000 11,76,000
The following information is furnished:
(i) One old machinery which has original cost of Tk. 30,000 was sold for Tk.10,000. The
accumulated depreciation in respect of the said machinery amounts to Tk.16,000.
(ii) One new machinery was acquired for Tk. 46,000.
(iii) 9% Debentures were redeemed at a discount of 4% of their face value.
(iv) Dividend at 12% was declared and paid in cash.
(v) Income-tax liability of Tk. 30,000 paid was debited to contingency reserve.
Required:
Prepare a Cash Flow Statement in accordance with the Bangladesh Accounting Standard -7(BAS-7)
[Marks: (4 +16) = 20]
Q. No. 3.
Hosaf Ltd. is a public company that would like to acquire (100%) a suitable private company. It has
obtained the following draft financial statements for two companies, Padma Ltd. and Jamuna Ltd.
They operate in the some industry and their managements have indicated that they would be
receptive to a takeover.
Income statements for the year ended 30 September 2008
Padma Ltd. Jamuna Ltd.
Tk. ’000 Tk. ’000 Tk. ’000
Revenue 12,000 20,500
Cost of sales (10,500) (18,000)
Gross profit 1,500 2,500
Operating expenses (240) (500)
Finance costs-loan (210) (300)
- overdraft nil (10)
- lease nil (290)
Profit before tax 1,050 1,400
Income tax expense (150) (400)
Profit for the year 900 1,000
Note: dividends paid during the year 250 700
Statements of financial position as at 30 September 2008
Profit for the year 900 1,000
Assets
Non-current assets
Freehold factory [note (i)] 4.400 nil
Owned plant [note (ii)] 5,000 2,200
Leased plant [note (ii)] Nil 5,300
9,400 7,500
Current assets
Inventory 2,000 3,600
Trade receivables 2,400 3,700
Bank 600 5,000 nil 7,300
Total assets 14,400 14,800

of 5
Q. No. 3. (Contd…..)
Equity and liabilities
Equity shares of Tk. 1 each 2,000 2,000
Property revaluation reserve 900 nil
Retained earnings 2,600 3,500 800 800
5,500 2,800
Non-current liabilities
Finance lease obligations [note (iii)] nil 3,200
7% loan notes 3,000 nil
10% loan notes Nil 3,000
Deferred tax 600 100
Government grants 1,200 4,800 nil 6,300
Current liabilities
Bank overdraft nil 1,200
Trade payables 3,100 3,800
Government grants 400 nil
Finance lease obligations [note (iii) nil 500
Taxation 600 4,100 200 5,700
Total equity and liabilities 14,400 14,800
Notes:
(i) Both companies operate from similar premises.
(ii) Additional details of the two companies’ plant are:
Padma Ltd. Jamuna Ltd.
Tk. ’000 Tk. ’000
Owned plant – cost 8,000 10,000
Leased plant – original fair value Nil 7,500
There were no disposals of plant during the year by either company.
(iii) The interest rate implicit within Jamuna Ltd.’s finance leases is 7.5% per annum. For the
purpose of calculating ROCE and gearing, all finance lease obligations are treated s long-term
interest bearing borrowings.
(iv) The following ratios have been calculated for Padma Ltd. and can be taken to be correct:
Return on year end capital employed (ROCE) 14.8%
(capital employed taken as shareholders’ funds plus long-term interest bearing borrowings –
see note (iii) above)
Pre-tax return on equity (ROE) 19.1%
Net asset (total assets less current liabilities) turnover 1.2 times
Gross profit margin 12.5%
Operation profit margin 10.5%
Current ratio 1.2:1
Closing inventory holding period 70 days
Trade receivables’ collection period 73 days
Trade payables’ payment period (using cost of sales) 108 days
Gearing [see note (iii) above] 35.3%
Interest cover 6 times
Dividend cover 3.6 times
Required:
(a) Calculate for Jamuna Ltd. the ratios equivalent to all those given for Padma Ltd. above.
(b) Assess the relative performance and financial position of Padma Ltd. and Jamuna Ltd. for the
year ended 30 September 2008 to inform the directors of Hosaf Ltd. in their acquisition
decision.
[Marks: (8+12) = 20]

of 5
Q. No. 4.
You have qualified as a CMA and joined in a company named Afnan Ltd. as a Assistant Finance
Controller. As per the requirement by the management of the company you were asked for current
year’s position based on following data which is not representing the true position of the company:
Afnan Ltd.
Statement of Financial Position
As on 31.12.2012.
Liabilities Amount (Tk.)
Share Capital :
Authorised
20,000, 10% redeemable preference share of Tk.10 each 200,000
180,000, Ordinary Shares of Tk.10 each 18,00,000
20,00,000
Issued, Subscribed and paid up Capital:
20,000, 10% redeemable preference share of Tk.10 each 200,000
20,000, Ordinary Shares of Tk.10 each ………… 200,000
Reserve and Surplus :
General Reserve …………………………………. 240,000
Securities premium ……………………………… 140,000
Profit and Loss Account....................................... 37,000
Current Liabilities & Provision:………………….. 23,000
840,000
Assets
Fixed Assets :
Gross Block ……………………………….Tk. 600,000
Less : Depreciation………………………… 200,000 400,000
Investment ……………………………………………. 200,000
Current Assets, Loans & Advances :
Inventories …………………………………. 50,000
Debtors…………………………………….. 50,000
Cash & Bank balance………………… 100,000 200,000
Miscellaneous Expenditure to the extent not written-off …… 40,000
840,000
For the year ended 31.12.2012, the company made a net profit of Tk. 30,000 after providing for Tk.
40,000 depreciation and writing off miscellaneous expenditure of Tk. 40,000. The following
additional information is available with regard to company’s operation.
i. The preference dividend for the year ended 31.12.2012 was paid before 31.12.2012.
ii. Except cash & balances, other current assets and current liabilities on 31.12.2012, was the
same as on 31.12.2011.
iii. The company redeemed the preference share at a premium of 10%.
iv. The company issued bonus shares in the ratio of 1 share for every two ordinary shares held as
on 31.12.2012.
v. To meet the cash requirements of redemption, the company sold a portion of the investments,
so as to leave a minimum balance of Tk. 60,000 after such redemption.
vi. Investments were sold at 90% cost as on 30.12.2012.
Required: (i) Necessary Journal entries.
(ii) Cash and Bank Account
(iii) Statement of Financial Position as on 31.12.2012.
[Marks: (6+4+10) = 20]

of 5
Q. No. 5.
(a) Monyem Limited reported a Profit Before Tax (PBT) of Tk. 4 Lakhs for the 3rd
Quarter ending
30th
September 2012. On enquiry you observe the following:
(i) Dividend Income of Tk. 4 Lakhs received during the quarter has been recognized to the
extent of Tk. 1 Lakh only.
(ii) 80% of Sales Promotion Expenses Tk. 15 Lakhs incurred in the 3rd
quarter has been
deferred to the 4th
quarter as the Sales in the last quarter is high.
(iii) In the 3rd
quarter, Monyem Limited changed depreciation method from WDV to SLM,
which resulted in excess depreciation of Tk. 12 Lakhs. The entire amount has been
debited in the 3rd
quarter, though the share of the 3rd
quarter is only Tk. 3 Lakhs.
(iv) Tk,2 Lakhs extraordinary gain received in 3rd
quarter was allocated equally to the 3rd
and
4th
quarter.
(v) Cumulative loss resulting from change in method of inventory valuation was recognized
in the 3rd
quarter of Tk. 3 Lakhs. Out of this loss Tk. 1 lakh relates to previous quarters.
(vi) Sale of investment in the 1st
quarter resulted in a gain of Tk. 20 Lakhs. Monyem Limited
had apportioned this equally to the 4 quarters.
⇒Prepare the adjusted Profit Before Tax for 3rd
quarter of Monyem Limited.
(b) Tammana Int. owes Yeasmine Int. Tk. 2,000 on 1st
April 2012. From 1st
April 2012 to 30st June
2012 the following further transactions took place between Tammana Int. and Yeasmine Int. :
April 10 : Tammana Int. buys goods from Yeasmine Int. for Tk. 5,000.
May 16 : Tammana Int. receives cash loan of Tk. 10,000 from Yeasmine Int.
June 9 : Tammana Int. buys goods from Yeasmine Int. for Tk. 3,000.
Tammana Int. pays the whole amount, together with interest @15% per annuam, to Farhana
Int. on 30th
June 2012.
⇒ Calculate the interest paid by Tammana Int. on 30th
June, 2012 by the average-due-date
method.
(c) The closing inventory at cost of MMH Ltd. amounted to Tk. 956,700. Shirts 350, which had
cost Tk. 380 each and normally sold for Tk. 750 each are included in this amount of Tk.
956,700. Owing to a defect in manufacture, they were all sold after the Balance Sheet date at
50% of their normal price. Selling expenses amounted to 5% of the proceeds.
⇒ What should be the closing inventory value as per BAS-2?
[Marks: (7 +6 +7) = 20]
= THE END =

of 3
SUBJECT: 102. COST ACCOUNTING.
Q. No. 1.
Haycarb Manufacturing produces two types of entry doors: Deluxe and Standard. The
assignment basis for support costs has been direct labor dollars. For 2012, Haycarb compiled
the following data for the two products:
Deluxe Standard
Sales units 50,000 400,000
Sales price per unit $650.00 $475.00
Direct material and labor costs per unit $180.00 $130.00
Manufacturing support costs per unit $ 80.00 $120.00
Last year, Haycarb Manufacturing purchased an expensive robotics system to allow for more
decorative door products in the deluxe product line. The CFO suggested that an ABC analysis
could be valuable to help evaluate a product mix and promotion strategy for the next sales
campaign. She obtained the following ABC information for 2012:
Activity Cost Driver Cost Total Deluxe Standard
Setups of setups $ 500,000 500 400 100
Machine-related of machine hours $44,000,000 600,000 300,000 300,000
Packing of shipments $ 5,000,000 250,000 50,000 200,000
Required:
a. Using the current system, what is the estimated:
i. total cost of manufacturing one unit for each type of door?
ii. profit per unit for each type of door?
b. Using the current system, estimated manufacturing overhead costs per unit are less for the
deluxe door ($80 per unit) than the standard door ($120 per unit). What is a likely
explanation for this?
c. Review the machine-related costs above. What is a likely explanation for machine-related
costs being so high? What might explain why total machining hours for the deluxe doors
(300,000 hours) are the same as for the standard doors (300,000 hours)?
d. Using the activity-based costing data presented above,
i. compute the cost-driver rate for each overhead activity.
ii. compute the revised manufacturing overhead cost per unit for each type of entry door.
iii. compute the revised total cost to manufacture one unit of each type of entry door.
e. Is the deluxe door as profitable as the original data estimated? Why or why not?
f. What considerations need to be examined when determining a sales mix strategy?
[Marks: (4+3+5+6+3+4) = 25]

of 3
Q. No. 2.
(a) Explain the difference between actual costing and normal costing. Describe the benefits of
using a predetermined overhead rate instead of an actual overhead rate.
(b) BIM Computers sells its popular PC-PAL model to distributors at a price of $1,250 per unit.
BIM’s profit margin is 20%. Factory orders average 400 units a week. Currently, BIM
works in a batch mode and produces a 4-week supply in each batch. BIM’s production
process involves three stages:
PC board assembly (the automatic insertion of parts and the manual loading, wave
soldering, and laser bonding of electronic components purchased from outside
sources),
Final assembly, and
Testing.
When the firm wants to change production from one model to another, it must shut down its
assembly line for half a way. The company estimates that downtime costs one-half hour of
supervisory time and an additional $2,000 in lost production and wages paid to workers directly
involved in changeover operations. Salaries for supervisory personnel involved amount to
$1,500 a day.
Although BIM products are generally regarded as high quality, intense price competition in the
industry has forced the firm to embark on a cost-cutting and productivity-improvement
campaign. In particular, BIM wants to operate with lower inventories but without sacrificing
customer service. Releasing some of the funds tired up in outputs inventory would allow BIM to
invest in a new product development project that is expected to yield a risk-adjusted return of
20%. Assume 50 workweeks in a year; 5 working days in a week and 8 working hours per day.
Required:
(i) Determine BIM’s total annual cost of production and inventory control.
(ii) Compute the economic batch size and the resulting cost savings.
[Marks: {5 +(7+8)} = 20]
Q. No. 3.
(a) What are cost objects, cost pools and allocation bases? What role do they play in cost
allocation? What is the difference between cost allocation bases and cost drivers?
(b) Kirk Manufacturing Company uses a job order costing system. At the beginning of April,
Kirk only had one job in process, Job #898. The job was finished during April by incurring
additional direct costs of $350 for materials and $700 for labor. Also during April, Job #899
was started and finished. The direct costs assigned to this job were $1,200 for materials
and $950 for labor. Job #900 was started during April but was not finished by the end of
the month. The direct costs assigned to this job $820 for materials, and $540 for labor.
Kirk applies manufacturing overhead to its products at a rate of 300% of direct labor cost.
Kirk's cost of goods manufactured for April was $14,570.
Find out the beginning balance of Work-in-Process.
[Marks: (10+10) = 20]

of 3
Q. No. 4.
(a) Discuss the accounting treatment of spoilage in a job order system.
(b) Austral Furniture manufactures high-quality furniture. During the past year, the company’s
design department developed a new product, a marble-topped dining table. This would be
the first time that Austral would work with marble. The company’s existing products were
made of timber, sometimes in conjunction with glass. The design department selected a
team of experienced tradespersons to manufacture a trial batch of 10 marble-topped
tables. A task analysis of the processes used to produce this batch of tables indicated the
following direct inputs and average costs per table:
Direct material $300
Direct labour $200
The average hourly labour rate for the team of tradespersons was $20 per hour.
Required:
Assuming an ‘80 percent learning curve’:
(i) Estimate how many direct labour hours will be required to produce a second batch of 10
marble-topped dining tables.
(ii) What is the direct labour cost per table for this second batch?
(iii) Will the last table produced in the second batch take the same amount of direct labour
time as did the first table in the batch? Why?
(iv) Assume that after completing and selling these first two batches Austral receives an order
from a wholesaler for a batch of 60 tables. How many direct labour hours will be required
to produce this batch of tables?
(v) What is the direct labour cost per table for the order form the wholesaler?
[Marks: 5+(3+3+3+3+3) = 20]
Q. No. 5.
The fixed costs of operating the maintenance facility of General Hospital are $4,500,000
annually. Variable costs are incurred at the rate of $30 per maintenance-hour. The facility
averages 40,000 maintenance-hours a year. Budgeted and actual hours per user for 20X3 are
as follows:
Budgeted hours Actual hours
Building and grounds 10,000 12,000
Operating and emergency 8,000 8,000
Patient care 21,000 22,000
Administration 1,000 1,200
Total 40,000 43,200
Assume that budgeted maintenance-hours are used to calculate the allocation rates.
Required
a. If a single-rate cost-allocation method is used, what amount of maintenance cost will be
budgeted for each department?
b. If a single-rate cost-allocation method is used, what amount of maintenance cost will be
allocated to each department based on actual usage? Based on budgeted usage?
c. If a dual-rate cost-allocation method is used, what amount of maintenance cost will be
budgeted for each department?
d. If a dual-rate cost-allocation method is used, what amount of maintenance cost will be
allocated to each department based on actual usage? Based on budgeted usage for fixed
operating costs and actual usage for variable operating costs?
[Marks: (3+3+4+5) = 15]]
= THE END =

of 2
SUBJECT: 103.MANAGEMENT AND MARKETING MANAGEMENT.
Time: Three Hours Full Marks : 100
Answer any THREE questions from each part
PART - A : MANAGEMENT (TOTAL MARKS:50)
Q.No.1
(a) Discuss the four basic activities that comprise the management process. How are they
connected with each other?
(b) Analyze the basic managerial roles and skills.
(c ) Discuss the classification of managers: “Theory X” and “Theory Y”.
[Marks: (5+5+6) = 16]
Q. No. 2.
(a) “Decision making is the catalyst that drives the planning process” – which do you think
easier for a top manager (i) making a decision or (ii) developing a plan? Explain in favour
of your answer.
(b) Highlight the fundamental and rational perspective of decision making.
(c) Summarize the comparative advantage and disadvantage of group decision making.
[Marks: (5+6+5) = 16]
Q. No. 3.
(a) Discuss “strategic planning”.
(b) Discuss the difference between strategic planning and annual planning?
(c ) Who are the strategic managers of a company? Discuss.
[Marks: (5+5+6) = 16]
Q. No. 4.
(a) Define personality and describe personality attributes that affect behavior in organization.
(b) “Appropriate leader behavior varies from one situation to another” – What are the three
major factors that influence the leadership behavior to change? Give a brief.
(c) Summarize the need hierarchy approaches to employee motivation.
[Marks: (5+5+6) = 16]
Q. No. 5.
(a) Discuss the seven traits associated with leadership.
(b) Explain the Fiedler’s contingency model of leadership.
(c) What are the sources of authority?
[Marks: (5+6+5) = 16]
* Two Marks are reserved for neatness and relevance.

of 2
SUBJECT: 103.MANAGEMENT AND MARKETING MANAGEMENT.
PART- B: MARKETING MANAGEMENT (TOTAL MARKS :50)
Q. No. 6.
(a) Define Need, Want and Demand in Marketing.
(b) Define customer value and satisfaction. How can a company deliver them?
(c) What is a marketing plan and what does it contain? Give a brief on it as a part of your
product planning process.
[Marks: (3+5+8) = 16]
Q. No. 7.
(a) Discuss briefly the “selling concept”.
(b) Why does a business advertize?
( c) Discuss the different methods of “Sales Promotion”
[Marks: (5+5+6) = 16]
Q. No. 8.
(a) What is marketing research? What are the steps of an effective marketing research
process?
(b) Define Marketing Information System (MIS). What are the three major tools an effective
MIS relies on?
(c) How can you organize your internal records to develop a strong MIS?
[Marks: (6+5+5) = 16]
Q. No. 9.
(a) Define SBU. Discuss the BCG matrix for evaluating the current business portfolio.
(b) Discuss Ansoff’s Product Market Expansion Grid and different forms of diversification.
[Marks: (8+8) = 16]
Q. No. 10.
(a) Explain how companies find and develop new-product ideas. Which is the best source of
new product ideas?
(b) What major commercialization plan elements must marketer address before launching a
new product?
(c) Differentiate between market penetration and market skimming pricing strategy for a new
product.
[Marks: (6+5+5) = 16]
* Two Marks are reserved for neatness and relevance.
= THE END =

SUBJECT: 104. INFORMATION TECHNOLOGY
Time : 2 hours 30 minutes Full Marks: 80
Answer any FOUR of the following questions.
Q. No. 1.
a) What is Software? Discuss the classifications of software.
b) Define Executive Support Systems (ESS). Write down the major components of ESS.
c) Explain the benefit and limitations of Expert Support System (ESS).
[Marks: (7+6+7) = 20]
Q. No. 2.
a) Why student of CMA should study information system?
b) Discuss briefly about major types of information systems in organization.
c) Describe the role of CIO in a company.
d) Write down the main features of fourth generation language?
[Marks: (5+5+5+ 5) = 20]
Q. No. 3.
a) What is data modeling? What is its purpose? Briefly describe three commonly used data models.
b) What is the difference between a data definition language (DDL) and a data manipulation
language (DML)?
c) What is a hypermedia database? How does it differ from a traditional database? How is it used
for the web?
[Marks: (7+5+8 = 20]
Q. No. 4.
a) What are controls? Distinguish between general controls and application controls.
b) What is security? How to develop a disaster recovery plan?
c) Why are digital signatures and digital certificates important for electronic commerce?
d) What are the sources of viruses and how it spread? How can you protect your computer from
viruses?
[Marks: (5+5+5+5) = 20]
Q. No. 5.
a) What infrastructures are required to support E-Commerce and M-Commerce?
b) What do you mean by Disaster Recovery Plan?
c) Define computer crimes with two examples?
[Marks: (8+6+6) = 20]
Q. No. 6.
a) What is DBMS? What are the major components of DBMS?
b) Discuss the features of DBMS.
c) What is data Validation?
d) In the information systems, why do we need to validate data? Mention some methods of data
validation.
[Marks: (5+4+3+8) = 20]
= THE END =
Page 1 of 1

of 5
PROFESSIONAL LEVEL-II
SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I
Q. No. 1.
(a) As per IAS-31, what do you mean by Jointly Controlled Operations?
(b) Vijay and Arun entered into a joint venture for purchase and sale of cotton. They agreed to
share profits in the proportion of 2:1 and also to be entitled to an interest of 12% per
annum (on monthly basis) on moneys invested as well as received. The following
transactions took place in between themselves:
i) On 1st
January 2012, Vijay purchased 1,000 bales of cotton @ Tk.500 per bale, the
brokerage being Tk.10 per bale.
ii) On 1st
February 2012, Arun purchased 500 bales of cotton @ Tk.520 per bale, the
brokerage being Tk.10 per bale.
iii) On 29th
February 2012, Vijay sold 800 bales of cotton @ Tk.572 per bale, the
brokerage being Tk.12 per bale and took the proceeds to himself.
iv) On 1st
April 2012, Arun sold 600 bales of cotton @ Tk.580 per bale, the brokerage
being Tk.10 per bale and took the proceeds to himself.
It was also agreed that each co-venture will at first sell from his own purchase and then, if need
be, from the goods purchased by other co-venture. The balance stock left unsold was taken by
Vijay at cost on 30th
April, 2012 when accounts were settled between the co-venture.
Required:
Prepare the Accounts of co-ventures and the joint venture Account as would appear when
maintained in separate set of books.
[Marks: (5+15)=20]
Q No.2.
(a) Write down the Licensing of financial institutions as per the Financial Institutions Act, 1993
(b) Lab Aid company and Prime Finance and Investment Ltd. sign a lease agreement On 1
January 2013 that calls for Prime Finance to lease equipment to Lab Aid beginning
January 2013. The terms and provisions of the lease agreement and other information are
as follows:
- The term of the lease is five years and the lease agreement is non cancellable,
requiring equal rental payments of 24,33,139.00 at the beginning of each year
- The equipment has a fair value at the inception of the lease is 1,00,00,000.00 . It has
an estimated economic life of 5 years without any residual value.
- Lessee company pays all of the executor costs directly to third parities except for the
property taxes of Tk 35,000.00 per annum, which is included in the annual payments
to the lessor.
- The lease contains no renewal option and the equipment have to hand over to the
lessor after the lease period.
- The lessee company incremental borrowing rate is 11% but the lessor company set
the annual rental to earn a rate of return on its investment @ 10% ,This fact is known
to the lessee company.
- The lessee company charges depreciation on its similar types of equipments under
straight line method.

of 5
Q. No. 2. (contd…….)
Required:
(i) Calculate the present value of the leased equipment.
(ii) Journalize the transaction in the books of Accounts of Lab AID company for the year
2013 and 2014 assuming the company follows calendar year.
(iii) Prepare a lease amortization Table.
[Marks: (4+5+6+5) = 20]
Q. No. 3.
(a) What are the provisions with regard to “Loan Loss Provision” and “Interest Suspense” of a
banking company as per IAS/BAS-30?
(b) From the following details of Western Bank Ltd prepare Profit and Loss Account for the
year ended 31st
December, 2012:
Taka
Interest paid on Deposits, Borrowings etc. 1,30,00,000
Interest and Discount Income 3,10,00,000
Rent Received 1,20,000
Net profit on sale of Investments 1,000
Salaries, Allowances and Provident Fund 1,25,00,000
Commission, Exchange and Brokerage 18,00,000
Law charges 20,000
Rent & Taxes 3,00,000
Postage and Telegrams 1,10,000
Auditors’ Fees 50,000
Directors’ Fees 25,000
Printing and Stationery 2,20,000
Depreciation on Property 1,90,000
Miscellaneous Receipts 85,000
Miscellaneous Expenditure 2,60,000
Repairs to Property 40,000
Telephone and Stamps 1,50,000
Advertisement 35,000
Bad Debts 50,000
Insurance and Lighting 2,00,000
The Chairman is paid salary @Tk.4,000 p.m. and allowances at Tk.1,000 per month. 8% is
contributed to Provident Fund on the basis of basic salary. No sitting fees nor any bonus has
been paid to him. Perquisite for free quarters and motor car is valued at Tk.6,000.
Opening balances of Unexpired Discount, Reserve for Bad Debts and Reserve for taxation were
Tk.10,00,000, Tk.6,00,000 and Tk.30,00,000 respectively. Closing balance required in
Unexpired Discount Account and Bad Debts Reserve Account are Tk.8,60,000 and Tk.7,50,000
respectively. Tk.25,00,000. Income Tax has been adjusted against Advance Payment of tax
amounting to Tk.30,00,000 and Tk.35,00,000 provision at the end of the year is required.
[Marks: (10+10) = 20]

of 5
Q .No.4.
(a) Distinguish between an Appropriation, an encumbrance and an expenditure.
(b) The Trial balance for the General fund of Khulna City Corporation as of December 31,
2011 is presented below:
Khulna City Corporation
The General Fund
Trial Balance
December 31, 2011
Accounts Title Debit Credit
Tk. Tk
Cash
Property Tax Receivable
Estimated uncollectible Taxes
Due From Trust Fund
Vouchers Payable
Reserve for encumbrances
Unreserved Fund Balance
8,30,000
45,000
50,000
20,000
4,60,000
30,000
4,15,000
9,25,000, 9,25,000
Transactions for the year ended December 31, 2012, are summarized as follows:
1. The city council adopted a budget for the year with estimated revenue of Tk. 7,35,000 and
appropriation of 7,00,000.
2. Property Taxes in the amount of Tk. 5,90,000 were levied for the current year . It is
estimated that Tk. 24,000 of the taxes levied will prove to be uncollectible.
3. Proceeds from the sale of equipment in the amount of Tk. 35,000 were received by the
General fund.
4. License and fees in the amount of Tk. 1,10,000 were collected.
5. The total amount of encumbrances against fund resources for the year was Tk. 6,42,500.
6. An invoice in the amount of Tk. 28,000 was received for goods ordered in 2012. The
invoice was approved for payment.
7. Property taxes amounted Tk. 5,70,000 were collected.
8. Vouchers in the amount of Tk. 4,75,000 were paid.
9. Tk. 50,000 was transferred to the general fund from the trust fund.
10. The Khulna City council authorized the write off of Tk. 30,000 in uncollectible property
taxes.
Required:
(i) Prepare Journal entries to record the transactions for the year ended December 31, 2012.
(ii) Prepare pre closing trial balance for the general fund as of December 31,2012.
(iii) Prepare necessary closing entries for the year ended December 31, 2012.
(iv) Prepare a Balance sheet as at December 31, 2012
[Marks: (7+5+2+2+4) = 20]

of 5
Q. No. 5.
ABC sells goods to the building industry and carries out construction contracts for clients. ABC’s
Trial balance at 30 September 2011 is shown below:
Notes Tk.000 Tk. 000
Administrative expenses
Cash and cash equivalents
Cash received on account from construction contract
clients during year to 30 September 2011 – contract 1
Cash received on account from construction contract
clients during year to 30 September 2011 – contract 2
Cash received on disposal of plant and equipment
Construction contract 1 - work in progress for year to 30
September 2011
Construction contract 2 - work in progress for year to 30
September 2011
Distribution costs
Equity dividend paid
Equity Shares $1 each, fully paid at 30 September
2011
Income tax
Interest paid – half year to 31 March 2011
Inventory at 30 September 2011 (excluding
construction contracts)
Long term borrowings (redeemable 2021)
Plant and equipment at cost 30 September 2011
Property at valuation 30 September 2010
Provision for deferred tax at 30 September 2010
Provision for plant and equipment depreciation at 30
September 2010
Provision for property depreciation at 30 September
2010
Cost of goods sold (excluding construction contracts)
Retained earnings at 30 September 2010
Sales revenue
Share premium at 30 September 2011
Trade payables
Trade Receivables
(i)
(i)
(iii)
(i)
(i)
(viii)
(v)
(iv)
(iii)
(ii)
(vi)
(iii)
(ii)
(vii)
1,020
440
3,750
2,250
590
250
15
58
310
4,930
11,000
3210
810
4,000
1,800
15
2,500
2,300
250
2,156
3,750
627
9,500
1,500
235
28,633 28,633
Additional information provided:
(i) At 30 September 2011 ABC had two construction contracts in progress.
Contract 1 Contract 2
Contract length 3 years 2 years
Date commenced 1 October 2010 1 April 2011
Fixed contract value TK. 11,000,000 Tk. 8,000,000

of 5
Q. No. 5. (contd…….)
Contract detail for year ended 30 September 2011
Contract 1 Contract 2
Proportion of work certified as completed 40% 25%
Tk. 000 Tk. 000
Construction contract work in progress 3,750 2,250
Estimated cost to complete contract 5,400 6,750
Cash received on account from construction
Contract clients during year 4,000 1,800
Both contracts use the value of work completed method to recognize attributable profit for
the year.
(ii) Property consists of land Tk.3,500,000 and buildings Tk.7,500,000. Buildings are
depreciated at 5% per year on the straight line basis. No buildings were fully depreciated
at 30 September 2011.
(iii) Plant and equipment is depreciated at 25% per year using the reducing balance method.
During the year to 30 September 2011 ABC sold obsolete plant for Tk.15,000. The plant
had cost Tk.75,000 and had been depreciated by Tk.65,000. All depreciation is considered
to be part of cost of sales. ABC’s policy is to charge a full year’s depreciation in the year of
acquisition and no depreciation in the year of disposal.
(iv) The long term borrowings incur annual interest at 5% paid six monthly in arrears.
(v) The income tax balance in the trial balance is a result of the under provision of tax for the
year ended 30 September 2010. The directors estimate the income tax charge on the
profit of the year to 30 September 2011 at Tk.910,000.
(vi) The deferred tax provision is to be increased by Tk.19,000.
(vii) On 1 August 2011, ABC was informed that one of its customers, EF, had ceased trading.
The liquidators advised ABC that it was very unlikely to receive payment of any of the
Tk.25,000 due from EF at 30 September 2011.
(viii) ABC made no new share issues during the year. ABC paid a final dividend for the year to
30 September 2010.
Prepare: ABC’s statement of comprehensive income and statement of changes in equity for the
year to 30 September 2011 and a statement of financial position at that date in accordance with
the requirements of International Financial Reporting Standards.
[Marks: (8+7+5) = 20]
= THE END =

of 4
SUBJECT: 202. MANAGEMENT ACCOUNTING.
Q. No. 1.
(a) Describe the various denominator levels that can be used with an absorption costing
system. Also explain why the choice of an appropriate denominator is important.
(b) The following data have been extracted from the budgets and standard costs of ABC
Limited, a company which manufactures and sells a single product.
Per unit
Tk.
Selling Price 45.00
Direct material cost 10.00
Direct wages cost 4.00
Variable overhead cost 2.50
Fixed production overhead cost are budgeted at Tk.400,000 per annum. Normal production
levels are thought to be 320,000 units per annum.
Budgeted selling and distribution cost are as follows:
Variable Tk.1.50 per unit sold
Fixed Tk. 80,000 per annum
Budgeted administration cost are Tk. 120,000 per annum.
The following pattern of sales and production is expected during the first six months of the
year:
January-March April-June
Sales (units) 60,000 90,000
Production (units) 70,000 100,000
There is to be stock on 1 January.
You are required
(i) to prepare profit statements for each of the two quarters, in a column format using
- Marginal costing, and
- Absorption costing;
(ii) to reconcile the profits reported for the quarter January-March in your answer to (a)
above.
[Marks: 5+(8+8)+4 = 25]
Q. No. 2.
A private hospital is organised into separate medical units which offer specialised nursing
care (e.g. maturity unit, paediatric unit). Figures for the paediatric unit for the year to 31 June
2011 have just become available. For the year in question the paediatric unit charged
patients Tk.2,000 per patient day for nursing care and Tk.44 million in revenue was earned.
Cost of running the unit consists of variable costs, direct staffing costs and allocated fixed
costs. The charges for variable costs such as catering and laundry are based on the number
of patient days spent in hospital. Staffing costs are established from the personnel
requirements applicable to particular levels of patient days. Charges for fixed costs such as
security, administrations etc. are based on bed capacity, currently 80 beds.

of 4
Q. No. 2. (contd…..)
The number of beds available to be occupied is regarded as bed capacity and this is agreed
and held constant for the whole year. There was an agreement that a bed capacity of 80
beds would apply to the paediatric unit for the 365 days of the year to 31 June 2011.
The table below shows the variable, staffing and fixed cost applicable to the paediatric unit
for the year to 31 June 2011.
Variable costs (based on patients days)Tk.
Catering 4,050,000
Laundry 1,500,000
Pharmacy 5,000.000
11,100,000
Staffing costs
Each speciality recruits its own nurses, supervisors and assistants. The staffing
requirements for the paediatric unit are based on the actual patient days, see the following
table:
Patients Days per annum Supervisors Nurses Assistants
Up to 20,500 4 10 20
20,500 to 23,000 4 13 24
Over 23,000 4 15 28
The annual costs of employment are: supervisors Tk.220,000 each, nurses Tk.160,000 each
and assistants Tk.120,000 each.
Fixed costs (based on bed capacity) Tk.
Administration 8,500,000
Security 800,000
Rent and property 7,200,000
During the year to 31 June 2011 the paediatric unit operated a 100% occupancy (i.e. all 80
beds occupied) for 100 days of the year. In fact, the demand on these days was for at least
20 beds more.
As a consequence of this, in the budget for the following year to 31 June 2012, an increase
in the bed capacity has been agreed. 20 extra beds will be contracted for the whole of the
year. It is assumed that the 100 beds will be fully occupied for 100 days, rather than being
restricted to 80 beds on those days. An increase of 10% in employment costs for the year to
31 June 2012, due to wage rate rises, will occur for all personnel. The revenue per patient
day, all other cost factors and the reaming occupancy will be the same as the year to 31
June 2011.
Required:
(a) Determine, for the year to 31 June 2011, the actual number of patient-days, the bed
occupancy percentage, the net profit/loss and the break-even numbers(s) of the patient
days for the paediatric unit.
(b) Determine the budget for the year to 31 June 2012 showing the revised number of
patient-days required to achieve the same profit/loss as computed in (a) above.
(c) The margin of safety of a certain level of sales of a company is 40%. The profit is
Tk.100,000. The management wants to increase sales by 15%. What will be the
expected profit after the increase of sales? Show the relationship between margin of
safety and degree of operating leverage.
[Marks: (8+8+4) = 20]

of 4
Q. No. 3.
(a) Why do conventional management accounting systems pay so much attention to
manufacturing costs? Do you think this is appropriate in to-days business
environment?
(b) Describe each activity of the value chain and explain why information about costs in
the various activities of the various activities of the value chain can be useful to
managers.
[Marks: (5+10) = 15]
Q. No. 4.
Sommers Ltd, a variety of industrial valves and pipe fittings that are sold to customers.
Currently, the company is operating at about 70 percent of capacity and is earning a
satisfactory return on investment. Management have been approached by Glasgow
Industries Ltd of Scotland with an offer to buy 120,000 units of pressure value. Glasgow
Industries manufactures a valve that is almost identical to the pressure value produced by
Sommers; however, a fire in Glasgow Industries’ valve plant has shut down its
manufacturing operations. Glasgow needs the 120,000 valves over the next four months to
meet commitments to its regular customers. Glasgow is prepared to pay $19 each for the
valves. The cost of the pressure valve produced by Sommers, which is based on current
attainable standards, is $20, calculated as follows:
Direct material $5.00
Direct Labour 6.00
Manufacturing overhead 9.00
Product cost $20.00
Manufacturing overhead is applied to production at the rate of $18 per standard direct labour
hour. This overhead rate is made up of the following components:
Variable manufacturing overhead $6.00
Fixed manufacturing overhead (traceable) 8.00
Fixed manufacturing overhead (allocated) 4.00
Applied manufacturing overhead rate $18.00
Additional cost incurred in connection with sales of the pressure valve includes sales
commissions of 5 percent of sales, and freight expense of $1 per unit. However, the
company does not pay sales commissions on special orders that come directly to
management. In determining selling prices, Sommers adds a 40 percent mark-up to total
product cost. This provides a $28 suggested selling price for the pressure valve. The
Marketing Department, however, has set the current selling price at $27 in order to maintain
market share. Production management believe that they can handle the Glasgow Industries
order without disrupting the department’s scheduled production. The order would, however,
require additional fixed factory overhead of $12 000 per month in the form of supervision and
clerical costs. If management accept the order, 30 000 pressure valves will be manufactured
and shipped to Glasgow Industries each month for the next four months. Glasgow’s
management have agreed to pay the shipping charges for the valve.
Required:
a. Determine how many direct labour hours would be required each month to fill the
Glasgow Industries order.
b. Prepare an analysis showing the impact of accepting the Glasgow Industries order.
c. Calculate the minimum unit price that management at Sommers could accept for the
Glasgow Industries order without reducing net profit.
d. Identify the factors, other than price, that Sommers Ltd should consider before
accepting the Glasgow Industries over.
[Marks: (3+8+4+5) = 20]

of 4
Q. No. 5.
NazAsh Pvt. Ltd. has had great difficulty in controlling manufacturing overhead costs. At a
recent convention, the Managing Director heard about a control device for overhead costs
known as a flexible budget, and he has hired you to implement the budgeting program in
NazAsh Company. After some effort, you have developed the following cost formulas for the
company’s Machining Department. These costs are base on a normal operating range of
10,000 to 20,000 machine-hours per month:
Overhead Cost Cost Formula
Utilities ------------------ Tk 0.70 per machine-hour
Lubricants -------------- Tk 1.00 per machine-hour plus Tk 8,000 per month
Machine setup --------- Tk 0.20 per machine-hour
Indirect labor ---------- Tk 0.60 per machine-hour plus Tk 120,000 per month
Depreciation ----------- Tk 32,000 per month
During March 2013, the first month after your preparation of the above data, the Machining
Department worked 18,000 machine-hours and produced 9,000 units of product. The actual
manufacturing overhead costs of this production were as follows:
Items Taka
Utilities ---------------------------------- 12,000
Lubricants ------------------------------- 24,500
Machine setup -------------------------- 4,800
Indirect labor --------------------------- 132,500
Depreciation ---------------------------- 32,000
Total manufacturing overhead costs 205,800
Fixed costs had no budget variances. The department had originally been budgeted to works
20,000 machine-hours during March 2013.
Required:
i. Prepare a flexible budget for the Machining Department in increments of 5,000 hours.
Include both variable and fixed costs in your budget.
ii. Prepare an overhead performance report for the Machining Department for the
month of March 2013. Include both variable and fixed costs in the report (in separate
sections). Show only a spending variance on the report.
iii. What additional information would you need to compute an overhead efficiency
variance for the department?
[Marks: (7+10+3)=20]
= THE END =

of 2
SUBJECT: 203. COMMERCIAL & INDUSTRIAL LAWS
Time: Three Hours Full Marks: 100
Answer SIX questions taking any THREE from each Part including compulsory question
No. 5 and 10.
GROUP- A: COMMERCIAL LAWS
Q. No. 1.
(a) “All Contracts are Agreement but all Agreements are not Contract” Discuss with a suitable
example.
(b) Who is a minor? In which cases a person continues to be a minor until he completes the
age of 21 years.
[Marks: (8+7) = 15]
Q. No. 2.
(a) Describe circumstances where contract may be enforceable even though they are illegal in
some respect.
(b) Explain with example how an offer is made?
[Marks: (8+7) = 15]
Q. No. 3.
(a) What type of tests would you apply to determine whether the agency relationship exists or
not between two parties?
(b) Differentiate between sub-Agent and Co-Agent.
[Marks: (8+7) = 15]
Q. No. 4.
(a) What are the essential features of Negotiable Instruments?
(b) Discuss the circumstances where dishonor of cheque for insufficiency of funds in the
account is not an offence.
[Marks: (8+7) = 15]
Q. No. 5.
Write short notes on any 04(four) of the following:
(a) Coercion;
(b) Estoppel;
(c) Allonge;
(d) Contract of Affreightment;
(e) Error of law;
(f) Copy Right Act-2000.
[Marks: (4 x 5) = 20]

of 2
SUBJECT: 203. COMMERCIAL & INDUSTRIAL LAWS
GROUP – B : INDUSTRIAL LAWS
Q. No. 6.
Define the following as per the Bangladesh Labour Act 2006-
(a) Manufacturing process; (b) Commercial Establishment; (c) Casual worker and Badli worker.
[Marks: (3 x 5) = 15]
Q. No. 7.
(a) What are the conditions of employment as per the Bangladesh Labour Act 2006?
(b) Who is an adolescent? Discuss the rule of employment of adolescent on dangerous
machines.
[Marks: (8+7) = 15]
Q. No. 8.
(a) Discuss the liability of a Garments Owner in respect of providing drinking water and
facilities of latrines & urinals in his factory as per the BLA 2006.
(b) Discuss unfair labor practices on the part of the workmen.
[Marks: (10+5) = 15]
Q. No. 9.
(a) What are the deductions which may be made from wages?
(b) Discuss the right to and liability for payment of maternity benefit.
[Marks: (10+5) = 15]
Q. No. 10.
Write short notes of any 04(four) of the following:
(a) Go-slow;
(b) Service book;
(c) Disputes as to age;
(d) Sick-leave;
(e) Arbitration;
(f) Partial disablement;
(g) Emergency Exit.
[Marks: (4 x 5) = 20]
= THE END =

of 3
SUBJECT: 204. TAXATION.
Time: Three Hours Full Marks : 100
Q. No. 1.
(a) Briefly explain the income tax provisions applicable in following cases:-
(i) Private Power Generation Company;
(ii) Private Medical College; and
(iii) Chamber of Commerce and Industry.
(b) M/S. ABC Ltd. is a Public Limited Industrial Company and its shares are regularly traded in
Stock Exchanges in Bangladesh. Its total income has been assessed to Tk. 25,50,000 for
the assessment year 2012-2013. The above total income includes Dividend Income of Tk.
1,00,000 and Capital Gain of Tk. 1,50,000. The company declared and paid 25% cash
dividend to its shareholders.
Required:
Calculate the tax liability of the company.
[Marks: {(3 x 3) +6} = 15]
Q. No. 2
(a) The following particulars of Mr. Ali Ahmed are available for the assessment year 2012-
2013:-
(i) Income from house property Tk. 10,00,000/-
(ii) Business income (after allowing current year’s
Depreciation of the Tk.. 2,00,000/-) Tk. 7,00,000/-
The following losses have been brought forward from the preceding year:
(i) Unabsorbed depreciation Tk. 8,00,000/-
(ii) Business loss Tk. 5,00,000/-
The DCT is proposing to assess him on a total income of Tk. 10,00,000/- by setting off
only of the business loss of Tk. 5,00,000/- and part of the unabsorbed depreciation of Tk.
2,00,000/- against the business income of Tk. 7,00,000/-. Is he right in his action?
(b) What are the losses that cannot be carried forward?
[Marks: (5+3) = 8]
Q. No. 3
(a) Explain the types of depreciation allowances allowed under the Income Tax Ordinance,
1984. How do they differ from accounting depreciation? What is unabsorbed
depreciation and how it can be carried forwarded?
(b) What is the procedure to apply for tax holiday? What are the documents to be attached
with such application?
(c) Explain settled tax liability scheme on certain incomes u/s 82C. Also mention
income/receipt where taxes are deducted/collected at source under settled liability
scheme. When is extra tax payable u/s 82C?
(d) Can the Taxes Appellate Tribunal pass an order exparte for non-appearance of the
appellant on the date of hearing? Differentiate between the question of fact and the
question of law.
[Marks: (5 X 4) = 20]

of 3
Q. No. 4
(a) Mr. X an employee of a limited company, received the following salaries and allowances
during the income year ended 30 June, 2012.
Particulars Taka
1. Basic salary 4,20,000/-
2. House rent allowance 2.00.000/-
3. Festival bonus equal to two months basic salary 70,000/-
4. Leave encashment salary 35,000/-
5. Conveyance allowance 24,000/-
6. Contribution to recognized provident fund @ 8% 33,600/-
7. Servant wages 24,000/-
8. Children education allowance 60,000/-
9. Leave fare assistance 50,000/-
10. Bungalow utilities 25,000/-
Compute excess perquisite as per section 30 (e) for the assessment year 2012-2013.
(b) How a foreigner being resident in Bangladesh will get foreign tax credit on the income
earned at their own country?
[Marks: (10+2) = 12]
Q. No. 5.
Mrs. Ferdous Ara FCMA is a retired Government Officer. Currently she works as advisor of XYZ
Ltd. and ABC Ltd. Both are private limited companies in Bangladesh. She also works as a part
time consultant of UNDP and World Bank. During the twelve months ended 30 June 2012 she
received the following income:
(a) From XYZ Ltd.
Basic salary Tk. 20,000/- = p.m.
House rent allowance Tk. 11,200/- = p.m.
Medical allowance Tk. 2,000/- = p.m.
Conveyance allowance Tk. 1,000/- = p.m.
(b) From ABC Ltd.
Basic salary Tk. 20,000/- = p.m.
House rent allowance Tk. 9,000/- = p.m.
Medical allowance Tk. 2,000/- = p.m.
Conveyance allowance Tk. 1,000/- = p.m.
Performance bonus Tk. 40,000/- = p.m.
No car was provided by any company.
(c) Consultancy fees of Tk. 4,00,000/- in total from UNDP for her work in Bangladesh and Tk.
3,00,000/-(in equivalent US dollar) from World Bank for her work in Bhutan and Nepal.
(d) Rental income @ Tk. 25,000 p.m. from an apartment owned by her. It is used by a
foreigner as his residence. She paid municipal tax of Tk. 40,000/-, land revenue of Tk.
2,000/- and a fire insurance premium of Tk. 15,000/- during the year. The apartment
remained vacant for 2 months during the year.
(e) Dividend of Tk. 50,000/- received from investment in shares of a number of listed
companies.
(f) She made a capital gain of Tk. 2,00,000/- by buying and selling listed companies shares
during the year.
(g) She earned interest of Tk. 15,000/- from post office savings bank account.

of 3
Q. No. 5. (contd…..)
(h) She entered into a contract with a developer on 1/11/11 for erecting a six storied building
with 10 flats out of which she will get 5 flats free of cost. In addition, she will be given Tk.
60,00,000/- in cash to be paid in 3 equal installments of Tk. 20,00,000/- each in
November, 2011, 2012 and 2013. She received Tk. 20,00,000/- in November 2011.
(i) She had an apartment which was sold for Tk. 1 Crore (which was same as the Mouza
value) on 1 August 2011. The buyer paid all the costs (including capital gain tax, stamp
duty, registration cost etc.) at the time of registration in August 2011. The apartment was
bought by her on 1 August 2004 at a cost of Tk.40 lac.
(j) Mrs. Ferdous Ara is a lecturer at the ICMAB evening coaching class and is also involved in
the ICMAB examination process. She is also a regular contributor of articles to the ICMAB
Journal and newspapers. From these sources she received the following additional
income during the year:
Taka
Lecture honourarium 60,000/-
Payments for articles published 25,000/-
Questions setting and scripts examination fees 12,000/-
She paid Tk. 3,000/- to a part-time typist for typing manuscripts of her articles.
(k) She received Tk. 25,000/- from agricultural land by selling crops.
(l) She received honorarium of Tk.50,000/- during the year as a Board Director of Rupali
Bank Ltd.
(m) Other information are as follows:
• Mrs. Ferdous Ara has taken a life insurance policy in favour of her son and has paid
quarterly premium of Tk. 5,000/- each throughout the year.
• She spent Tk. 10,000/- on professional and technical books and publications during
the year.
• She paid an annual subscription of Tk. 4,800/- to ICMAB on 1/7/11.
• She owns and maintains a motor car.
• She sold the shares of a listed company for Tk. 2,00,000/- which she bought for Tk.
1,50,000/- in the income year 2010-2011, and for which she claimed and received
the allowable tax rebate for the investment. She has again bought shares of 3 other
listed companies during the year for Tk. 6,00,000/-
• Mrs. Ferdous Ara declared more than 20% income in comparison to previous
assessment year.
Required:
Compute the total income and tax liability of Mrs. Ferdous Ara for the assessment year
2012-2013, advising whether she should submit the return under “Universal Self
Assessment Scheme” or under normal procedure.
[Marks: 30]
Q. No. 6.
(a) What are the rates of gift tax in Bangladesh? What is the rationale of imposition of gift tax?
(b) Distinguish among ‘Credit’, ‘Drawback’ and ‘Refund’ as per the VAT Act, 1991.
(c) Mention five situations where Input Tax Credit is not allowed as per related section of the
VAT Act, 1991.
(d) Discuss in brief about timing and modes of payment of the Value Added Tax.
[Marks: (3+4+4+4) = 15]
= THE END =

of 6
PROFESSIONAL LEVEL-III
SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II.
Q. No. 1.
(a) What is business combination? What are the types of business combinations? Explain
briefly each of the types of combinations.
(b) Autumn Ltd acquired 100% of Spring Ltd on 1 January 2011 when fair value of Spring
Ltd’s identifiable assets net of liabilities assumed was Tk.20,000,000.
The consideration was:
8 million shares in Autumn Ltd issued on 1 January 2011 when market price of Autumn Ltd’s
shares was Tk.3.5.
A further payment of cash on 31 December 2012:
• Tk.700,000 if Spring Ltd’s profits for the year ended 31 December 2012 were no less
than Tk.2 million.
• Tk.1,750,000 if Spring Ltd’s profits for the year ended 31 December 2012 were no
less than Tk.3 million.
At 1 January 2011 the fair value of contingent consideration was Tk.100,000.
At 31 December 2011 the fair value of the contingent consideration was Tk.1,200,000.
A discount rate of 10% was used in measuring these fair values.
At 31 December 2012 Spring Ltd’s 2012 profits per draft financial statements were 3.5
million.
Required:
Show calculations of the amounts to be recognized in the statements of financial position
and in profit or loss for the years ended 31 December 2011 and 2012.
[Marks: (5+10) = 15]
Q. No. 2.
Z & Co. purchased ordinary shares of P & Co. in the following sequence:
Date of purchase No. of shares purchased Amount paid
January 1, 2007 1,000 shares Tk. 25,000
January 1, 2009 500 shares Tk. 13,000
January 1, 2010 2,000 shares Tk. 58,000
Z & Co. initially recorded its investment in equity securities of P & Co. under the cost
method. But the purchase of shares of Z & Co. on January 1, 2010, gave Z & Co. the ability
to exercise significant influence over the P & Co. in their decision making process. Z & Co.,
therefore, decided to switch over to the equity method in recording its investment in shares
of P & Co. retroactively from the date of the initial investment.
The book value of P & Co.’s net assets at January 1, 2007, was Tk. 200,000. P & Co.’s
reported net income and dividend paid since Z & Co. first purchased shares of P & Co. were
as follows:
2007 2008 2009 2010
Net income (Tk.) 40,000 60,000 40,000 50,000
Dividend paid (Tk.) 20,000 20,000 10,000 20,000

of 6
Q. No. 2 (Contd……)
The amount paid in excess of the book value of P & Co.’s net assets was attributed to the
increase in the value of identifiable intangible assets with a remaining life of five years at the
date the shares of P & Co. were purchased. P & Co. has had 10,000 ordinary shares
outstanding throughout the four-year period.
Required:
(a) Calculate book value of P & Co.’s net assets on each of the dates, Z & Co. acquired
their equity securities.
(b) Calculate excess of acquisition costs of Z & Co. over book values of securities of P &
Co. on each acquisition date.
(c) Re-calculate income on investment in P & Co.’s shares under equity method in books
of Z & Co.
(d) Give the journal entries recorded on Z & Co.’s books in 2010 related to its investment
in P & Co.’s shares.
[Marks: (4 x 5) = 20]
Q. No. 3.
On January 1, 2011, H & Co. purchased 80 percent of S & Co.’s ordinary shares for Tk.
34,600.
The trial balances for the two companies on December 31, 2012 were as follows:
H & Co. S & Co.
Items Dr.(Tk.) Cr.(Tk.) Dr.(Tk.) Cr.(Tk.)
Cash 11,800 6,200
Accounts Receivable 16,600 14,200
Inventory 55,000 23,600
Land 16,000 6,000
Buildings & Equipment 100,000 30,000
Investment in S & Co.’s
ordinary shares
43,000
Cost of Goods Sold 98,000 62,000
Depreciation Expense 5,000 3,000
Other Expenses 12,400 20,000
Dividends Declared 9,000 5,000
Accumulated Depreciation 36,000 18,000
Accounts Payable 17,200 6,000
Mortgage Payable 40,000 14,000
Ordinary Shares 60,000 10,000
Retained Earnings,
January 1, 2012
77,000 28,000
Sales 130,000 94,000
Income from Subsidiary 6,600
366,800 366,800 170,000 170,000
(1) On January 1, 2011, S & Co. reported net assets with a book value of Tk. 30,000. A
total of Tk. 4,000 of the purchase price is applied to goodwill. At December 31, 2012. H
& Co. management reviewed the amount attributed to goodwill and concluded that
goodwill was impaired and should be reduced to Tk. 1,200.
(2) S & Co.’s depreciable assets had a estimated economic life of 11 years on the date of
combination. The difference between fair value and book value of tangible assets is
related entirely to depreciable assets.
(3) H & Co. used the equity method in accounting for its investment in Subsidiary
company.

of 6
(4) Detailed analysis of receivables and payables showed that S & Co. owed to H & Co.
Tk. 1,800 on December 31, 2012.

of 6
(5) An analysis of inventory of showed that beginning inventory of S & Co. included an
amount of Tk. 10,000 which was sold in the year 2012; there was no such unsold
inventory purchased from holding company.
(6) An analysis of purchase and sales should that during the year 2012, S & Co.
purchased inventory from H & Co. to the extent of Tk. 20,000 that was fully sold to 3rd
parties during the year 2012.
Required:
(i) Give all journal entries recorded by H & Co. with regard to its investment in S & Co.
during 2012.
(ii) Give all eliminating entries needed to prepare consolidated financial statements for the
year 2012.
(iii) Prepare equity method consolidated work paper as of December 31, 2012.
[Marks: (3+7+15) = 25]
Q. No. 4.
(a) Define ‘monetary’ items according to IAS/BAS 21.
(b) What factors must management take into account when determining the functional
currency of a foreign operation?
(c) Rumble Ltd is a retailer of fine furniture. On 19 October 2011 Rumble purchased 100
antique tables from a US supplier for a total of $3,600,000. Rumble has a year end of
31 December 2011 and uses sterling as its functional currency.
Exchange rates are as follows:
19 October 2011 £1=$1.8
15 December 2011 £1=$1.9
20 December 2011 £1=$1.95
31 December 2011 £1=$2.0
Average rate for 2011 £1=$1.6
3 February 2012 £1=$2.4
Required:
Determine, according to IAS21/BAS21 The Effects of changes in Foreign Exchange Rates,
the impact of the above transaction on the profits of Rumble for the year ended 31
December 2011 and on the statement of financial position at that date under each of the
following alternative assumption.
Assumption 1 : All the tables were sold on 20 December 2011 and were paid for by Rumble
on 15 December 2011.
Assumption 2 : All the tables were sold on 3 February 2012 and were paid for by Rumble on
15 December 2011.
Assumption 3 : All the tables were sold on 15 December 2011 and were paid for by Rumble
on 3 February 2012.
Assumption 4 : 75 of the tables were sold on 15 December 2011 with the remaining 25
tables being sold on 3 February 2012. All the tables were paid for by Rumble on 3 February
2012.
[Marks: (5+5+15) = 25]
Q. No. 5.
D & Co. sells merchandise at both its head office in Dhaka and branch in Khulna. The head
office bills merchandise shipped to the branch at 125% of head office cost, and is the only
supplier for the branch.
Shipments of merchandise to the branch have been recorded improperly by the head office
by credits to Sales for the billed price. Both the head office and the branch use the perpetual
inventory system.

of 6
D & Co has engaged you to audit financial statements for the year ended December 31,
2012. You were provided with the following unadjusted trial balances:
Head office Branch
Items Tk. Tk.
Cash 6,200 2,600
Accounts Receivable, net 4,000 4,400
Inventory 8,000 1,600
Branch Account: Khulna 9,000
Equipment, net 30,000
Dividend Declared 10,000
Cost of Goods Sold 50,000 18,600
Operating Expenses 14,000 7,200
Totals 131,200 34,400
Accounts Payable 4,600
Accrued liabilities 400
Long-term Notes Payable 10,200
Ordinary Shares 30,000
Retained Earnings, Jan. 1, 2012 8,400
Head Office 2,000
Sales 78,000 32,000
Totals 131,200 34,400
Additional information:
(i) On January 1, 2012, inventory of head office amounted to Tk. 5,000 and inventory of
the branch amounted to Tk. 1,200. During 2012, the branch was billed for Tk. 21,000
for shipments from the head office.
(ii) On December 27, 2012, the head office billed the branch for Tk. 2,400, representing
the branch's share of operating expenses paid by the head office. This billing had not
been recorded by the branch.
(iii) All cash collections made by the branch were deposited in a local bank to the bank
account of the head office. Deposits of this nature included the following:
Branch deposit date Head office Amount
record date Tk.
December 28, 2012 December 31, 2012 1,000
December 30, 2012 January 2, 2013 600
December 31, 2012 January 3, 2013 1,400
January 2, 2013 January 5, 2013 400
(iv) Operating expenses incurred by the branch were paid from an imprest bank account
that was reimbursed periodically by the head office. On December 30, 2012, the head
office had mailed a re-imbursement cheque in the amount of Tk. 600, which had not
been received by the branch as of December 31, 2012.
(v) A shipment of merchandise from the head office to the branch was in transit on
December 31, 2012.
Required:
(a) Prepare journal entries to rectify and adjust the accounting records of the head office of
the D & Co. on December 31, 2012. Establish an allowance for over valuation of
branch inventory.
(b) Prepare journal entries to adjust the accounting records of the Khulna branch of the
company on December 31, 2012.

of 6
[Marks: (8+7) = 15]
= THE END =

of 5
SUBJECT: 302. ADVANCED COST ACCOUNTING
Q. No. 1.
Samir & Co. is a manufacturing company which processes and cans tomato catsup in 24 ounce
jar. The standard input for a batch is as follows:
Particulars Pound Standard Price per Pound (Taka)
Tomatoes 340 0.60
Corn Syrup 75 0.10
Vinegar 25 0.40
Salt 10 0.20
Onion powder, Spice and Flavoring 50 0.53
Input 500
Output 400
The recipe used not only is secret but also allows for some variation in ingredients in obtaining
the special flavor. The following materials were purchased during the month. Direct materials
inventory is kept at standard.
Particulars Pound Actual Cost (Taka)
Tomatoes 23,000 14,950
Corn Syrup 5,000 250
Vinegar 3,000 1,320
Salt 800 176
Onion powder, Spice and Flavoring 2,500 1,200
During the month 18,000 jars were filled with the following materials put in process:
Particulars Pound [16 ounce= 1 pound]
Tomatoes 22,100
Corn Syrup 3,900
Vinegar 1,900
Salt 500
Onion powder, Spice and Flavoring 1,950
Total 30,350
Required:
(i) Compute a materials purchase price variance for each of the materials and a material total
mix and total yield variance for the month. Indicate if the variance is favorable or
unfavorable.
(ii) Prepare journal entries to record the issuance of materials, the variance and the
disposition of the variance.
[Marks: (14+6) = 20]

of 5
Q. No. 2.
Padma Food Inc., a grocery chain consisting of different stores, operates in a state that permits
each of its municipalities to levy an income tax on corporations operating with their respective
city limits. This legislation establishes a uniform tax rate that may be levied by the municipality.
Regulations also provide that the tax rates to be computed on income derived within taxing
municipality after a reasonable and consistent allocation of general overhead expenses, which
include warehouse, central office, advertising and delivery expenses. General overhead
expenses have not been allocated previously to Padma’s Store.
General overhead expenses for the year were as follows:
Particulars Taka Taka
Delivery and warehousing expenses:
Delivery expenses 40,000.00
warehouse operations 30,000.00
warehouse depreciation 20,000.00 90,000.00
Central office expenses:
Advertising 18,000.00
Central office salaries 37,000.00
Other central office expenses 28,000.00 83,000.00
Total general overhead expenses 1,73,000.00
Additional Information:
(a) One fifth of the warehouse space is used to house the central office and depreciation of
this space is included in the other central office. Warehouse operating expenses vary with
the quality of merchandise sold.
(b) All advertising is prepared by the central office and is distributed in the areas in which
stores are located.
(c) As each store was opened, the fixed portion of central office salaries increased by Tk.
7,000.00, which other central office expense increased by Tk. 2,500.00. Basic fixed central
office were Tk. 10,000.00 and the basic fixed other central office expense was Tk. 12,000.
The remainder of central office salaries and the remittance of other central office expenses
vary with sales.
(d) The delivery expense varies with the distance and the number of deliveries. The distances
form the warehouse to each store and the number of deliveries made during the year
were:
Store Miles No. of Deliveries
Buriganga 120 140
Karnaphuli 200 64
Jamuna 100 104
The year’s operating results, before deducting general overhead expense and the tax for each
store were:

of 5
Q. No. 2. (contd……..)
Particulars
Store (in Taka)
Buriganga Karnaphuli Jamuna Total
Net sales 4,16,000.00 3,53,600.00 2,70,400.00 1,040,000.00
Less: Cost of goods sold 2,15,700.00 1,83,300.00 1,40,200.00 5,39,200.00
Gross Profit 2,00,300.00 1,70,300.00 1,30,200.00 5,00,800.00
Less: Other local operating exp.
Fixed 60,800.00 48,750.00 50,200.00 1,59,750.00
Variable 54,700.00 64,220.00 27,448.00 1,46,368.00
Total 1,15,500.00 1,12,970.00 77,648.00 3,06,118.00
Operating income before general
overhead and income tax 84,800.00 57,330.00 52,552.00 1,94,682.00
Required:
(i) Under each of the following allocation plans, compute the operating income for each store
that would be subject to the municipal tax levy on corporation income:
Plan 1: Allocate all general overhead expenses on the basis of sales volume.
Plan 2: First, allocate central office salaries and the other central office expense equally
to warehouse operations and to each store.
Second, allocate the resulting warehouse operations expense, warehouse
depreciation and advertising to each store on basis of sales volume.
Third, allocate delivery expenses to each store on the basis of delivery miles
multiplied by number of deliveries.
(ii) Formulate a management decision to determine which store should be selected for
expansion in order to maximize corporate profits. This expansion will increase Padma’s
sales by Tk. 60,000.00 and its local fixed operating expense by Tk. 7,500.00 and it will
require ten additional deliveries from the warehouse.
[Marks: (12+8) = 20]
Q. No. 3.
(a) What are the differences between normal and abnormal loss? Explain how both should be
reported for management purposes.
(b) The Kim Company is a furniture manufacturer with two departments - molding and
finishing. The company uses the weighted average method of process costing. In August,
the following data were recorded for the Finishing Department.
Units of beginning work in process inventory 12,500
Percentage completion of beginning work in process units 25%
Cost of direct materials in beginning work in process Tk. 0
Units started 87,500
Units completed 62,500
Units in ending inventory 25,000
Percentage completion of ending work in process units 95%
Spoiled units 12,500

of 5
Q. No. 3. (contd……..)
Total costs added during current period
Direct materials Tk. 819,000
Direct manufacturing labor Tk. 794,500
Manufacturing overhead Tk. 770,000
Work in process, beginning
Transferred in costs Tk. 103,625
Conversion costs Tk. 52,500
Cost of units transferred in during current period Tk. 809,375
Conversion costs are added evenly during the process. Direct material costs are added when
production is 90% complete. The inspection point is at the 80% stage of production. Normal
spoilage is 10% of all good units that pass inspection. Spoiled units are disposed of at zero net
disposal value.
For August, summarize total costs to account for, and assign these costs to units completed and
transferred out (including normal spoilage), to abnormal spoilage and to units in ending work in
process.
[Marks (5+15) = 20]
Q. No. 4.
(A) Rayman Company produces three chemical products, J1X, J2Y and B1Z. Raw materials are
processed in single plant to produce two intermediate products, J1 and J2, in fixed proportions.
There is no market for these two intermediate products. J1 is processed further through process
X to yield the product J1X, product J2 is converted into J2Y by a separate finishing process Y.
The Y finishing process produces both J2Y and a waste material, B1, which has no market
value. The Rayman Company can convert B1, after additional processing through process Z,
into a saleable by product, B1Z. The company can sell as much B1Z as it can produce at a price
of Tk. 1.50 per kg.
At normal levels of production and sales, 600,000 kg of the common input material are
processed each month. There are 440,000 kg and 110,000 kg respectively, of the intermediate
products J1 and J2, produced from this level of input. After the separate finishing processes,
fixed proportions of J1X, J2Y and B1Z emerge as shown below with current market prices (all
losses are normal losses):
Product Quantity kg. Market Price per kg
J1X 400,000 Tk. 2.425
J2Y 100,000 Tk. 4.50
B1Z 10,000 Tk. 1.50
At these normal volumes, materials and processing costs are as follows:
Common plant Facility Separate Finishing Processes
(Tk. 000) (Tk. 000) (Tk. 000) (Tk. 000)
Direct materials 320 110 15 1.0
Direct labour 150 225 90 5.5
Variable overhead 30 50 25 0.5
Fixed overhead 50 25 5 3.0
Total 550 410 135 10.0

of 5
Q. No. 4. (contd……..)
Selling and administrative costs are entirely fixed and cannot be traced to any of the three
products.
Required:
(a) Draw a diagram which shows the flow of these products, through the processes, label the
diagram and show the quantities involved in normal operation.
(b) Calculate the cost per unit of the finished products J1X and J2Y and the total
manufacturing profit, for the month, attributed to each product assuming all joint costs are
allocated based on:
(i) Physical units
(ii) Net realizable value
(B) Discuss the arguments for and against each of the methods of allocating joint costs to
products.
[Marks: (5+10)+5= 20]
Q. No. 5.
(a) Given the strong cost orientation in a target costing environment, there is obviously a
considerable role for the cost accountant on a design team. What are the specific activities
and required skills of this person?
(b) Many advocates of standard costing take the position that these costs are a proper basis
for inventory costing for external reporting purposes. Accounting Research Bulletin No.43,
however, reflects the widespread view that standard costs are not acceptable unless
“adjusted at reasonable intervals to reflect current conditions so that at the balanced sheet
date standard costs reasonably approximate costs computed under one of the recognized
bases.
Required:
(i) Discuss the conceptual merits of using standard costs as the basis for inventory costing
for external reporting purposes.
(ii) Prepare general journal entries for three alternative dispositions of a Tk. 1,500 unfavorable
variance, when all goods manufactured during the period are included in the ending
finished goods inventory. Assuming that a formal standard costs exceeding normal
(attainable) standard cost and that Tk. 1,000 of the variance resulted from the difference
between the theoretical (identical) standard and normal standard.
(iii) Discuss the conceptual merits of each of the three alternatives methods of disposition
requested in Requirement (ii) mentioned above.
[Marks: 8+(3+5+4)= 20]
= THE END =

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