Question April-2010

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL-2010 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. OVERNIGHT AUTO SERVICE

Trial Balance As At December 31, 2009

Balance Sheet Accounts: Dr. Cr. Tk. Tk. Cash 18,592 Accounts Receivable 6,500 Shop Supplies 1,800 Unexpired Insurance 4,500 Land 52,000 Building 36,000 Accumulated Depreciation: Building 1,500 Tools and Equipment 12,000 Accumulated Depreciation: Tools and Equipment 2,000 Notes Payable 4,000 Accounts Payable 2,690 Income Tax Payable 1,560 Unearned Rent Revenue 9,000 Capital Stock 80,000 Retained Earnings 0 Dividends 14,000 Income Statement Accounts: Repair Service Revenue 171,250 Advertising Expense 3,900 Wages Expense 56,800 Supplies Expense 6,900 Depreciation Expense: Building 1,500 Depreciation Expense: Tools and Equipment 2,000 Utilities Expense 19,400 Insurance Expense 13,500 Income Tax Expense 22,608 ________ Total 272,000 272,000

Adjustments: (a) Shop Supplies used in December Tk. 600. (b) Portion of Insurance Cost Expired in December Tk. 1,500. (c) Depreciation on Building for December Tk. 150. (d) Depreciation of Tools and Equipment for December Tk. 200. (e) Earned one-third of Rent Revenue collected in advance from Harbor Cab. Tk. 3,000. (f) Unpaid Wages owed to Employees at December 31, Tk. 1,950. (g) Interest Payable accrued during December Tk. 30. (h) Repair Service Revenue earned in December but not yet billed Tk. 750. (i) Income Tax Expense for December Tk. 4,020 not accounted for.

Required: (i) Ten column worksheet as at December 31, 2009. (ii) Income Statement for the year ended December 31, 2009. (iii) Balance Sheet as at December 31, 2009

[Marks: (15+5+5) = 25]

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CMA APRIL-2010 EXAMINATION FOUNDATION LEVEL SUBJECT: 001.PRINCIPLES OF ACCOUNTING. Q. No. 2. This information is available for Navana Company as of July 31, 2009. Cash on the books as of July 31, 2009 amounted to Tk. 21,327. Cash on Bank Statement for the same date was Tk. 26,176. A deposit of Tk. 2,610, representing cash receipts of July 31, did not appear on the bank statement. A cheque for Tk. 960 returned with the statement was recorded incorrectly in the cheque registrar as Tk. 690. The cheque was made for a cash purchase of merchandise. Outstanding cheque totaled Tk. 1,968. Bank service charge for July amounted Tk. 12. The bank collection for Navana Company Tk. 6,120 on a note. The face value of the note was Tk. 6,000. An NSF cheque for Tk. 92 from a client, Jalil Traders, came bank with the statement. The bank mistakenly charged to the company account a cheque for Tk. 425 drawn by another company. The bank reported that it had credited the account for Tk. 170 in interest on the average balance on July. Required: (i) Prepare Bank Reconciliation Statement as of July 31, 2009. (ii) Prepare the necessary Journal Entries to adjust the Cash Account.

[Marks: (10+5) = 15] Q. No. 3. Clayco Company competes the following selected transactions during the year 2009. July 14 Writes off a Tk. 750 Account Receivable arising from a sale to Briggs Company that

dates to 10 months ago. (Clayco Company uses the allowance method). July 30 Clayco Company receives a Tk. 1,000, 90 days, 10% note in exchange for

merchandise sold to Sumrell Company (the merchandise cost Tk. 600). August 15 Receives Tk. 2,000 cash plus a Tk. 10,000 note from JT Co. in exchange for

Merchandise that sells for Tk. 12,000 (its cost is Tk. 8,000. The note is dated August 15, bears 12% interest, and matures in 120 days.

Nov. 01 Competed a Tk. 200 credit Card sale with a 4% fee (the cost of sale is Tk. 150). The cash is received immediately from the credit card company.

Nov. 03 Sumrell Company refuses to pay the note that was due to Clayco Company on October 28.

Nov. 05 Completed a Tk. 500 credit card sale with a 5% fee (the cost of sale is Tk. 300). The payment from the credit card Company is received on Nov. 9.

Nov. 15 Received the full amount of Tk. 750 from Bridge Company that was previously written off on July 14. Record the bad debts recovery.

Dec. 13 Received payment of principle plus interest from JT for the August 15 note. Required: Prepare the Journal Entries to record these transactions on Clayco Company books.

[Marks: 20] Q. No. 4. (a) “Accounting is an essential weapon to Management” – Explain. (b) What do you mean by Interest Bearing Notes Payable and Non-Interest Bearing Notes Payable? (c) What are the advantages of using the perpetual inventory system as compared with the periodic

system? (d) What is EOQ? Explain its utility. (e) Differentiate between preferred stock and common stock.

[Marks: (5 x 5) = 25]

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CMA APRIL-2010 EXAMINATION FOUNDATION LEVEL SUBJECT: 001.PRINCIPLES OF ACCOUNTING. Q. No. 5.

(a) What are the partnership agreement as per partnership act 1932?

(b) Sumi and Shuva has been partners for several years, operating “FAST MOVES” a moving business. The business has its ups and downs, but overall quite successful. In recognition to Sumi’s administrative responsibilities the profit and loss sharing agreement allows her salary of Tk. 5,000, with the remainder shared equally. On January 1, 2000 Sumi and Shuva has capital balances of Tk. 14,000 and 9,000 respectively. During 2000 Sumi withdrew Tk. 4,000 cash from the partnership.

On December 2000 the net income of Tk. 11,000, cash 4000, other assets Tk. 29,000 and accounts payable Tk. 3,000. Sumi and Shuva liquidate the partnership on January 1, 2001. On that date other assets were sold for Tk. 35,000, creditors were paid and the partners received the remaining cash.

Required:

(i) Prepare a schedule showing how the Tk. 11,000 net income for the year 2000 should be divided between Sumi and Shuva.

(ii) Prepare a statement of partners capital accounts and Balance Sheet on December 31, 2000.

(iii) Give the Journal entries for liquidation on January 01, 2001. [Marks: 15]

= THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH

CMA APRIL, 2010 EXAMINATION

FOUNDATION LEVEL

SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT.

Time: Three hours Full Marks: 100 Answer any 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. All questions must be answered in English.

PART – A : BUSINESS COMMUNICATION

Q.No. 1. (a) Describe the roles and importance of communication in management. (b) What are the communication components and how do they interact? (c) Explain the methods to develop learning, reading, listening and writing skills and ability to

communicate on your respective fields of knowledge. [Marks: (4+4+7) = 15]

Q. No. 2 (a) Discuss the main points regarding importance of Business Letter. (b) Discuss the different parts of a commercial letter. (c) Draft a letter to the authority of an insurance company for an insurance claim of your company.

[Marks: (4+5+6) = 15] Q. No. 3 (a) What are the major objects of a letter of application for appointment? (b) Suppose you have been offered a position of CEO by XYZ Co. Ltd. Write a letter to the

Managing Director accepting the offer. (c) Define report and distinguish between informal and formal reports.

[Marks: (5+6+4) = 15] Q.No.4 Write short notes on any FIVE of the following: (a) E-mail; (b) Merchant Banking; (c) Book Building Method; (d) Online Banking; (e) Foreign remittance; (f) SEC; (g) NBR; (h) BOE; and (i) WTO.

[Marks: (5 4) = 20]

PART – B : OFFICE MANAGEMENT

Q. No. 5. (a) What is Office Management? (b) Discuss the Importance and Necessity of Office Management? (c) Discuss different Organizational structure of Banking sector, Corporation & Govt.

Office with a diagram. [Marks: (3+3+9) = 15]

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CMA APRIL, 2010 EXAMINATION FOUNDATION LEVEL SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT. Q. No. 6. (a) What do you mean by Office Environment? (b) Discuss the Importance of Office Manual. (c) “Inter Office relationship, Co-ordination, mail operations, different office

correspondence is a must for better management of the office”. Do you agree with these views? and why?

[Marks: (3+3+9) = 15] Q. No. 7. (a) Why location, Premises, layout, men and equipments are considered as factors of

efficient office organization? (b) What are the steps involved in the process of office management?

[Marks: (10+5) = 15] Q. No. 8. Write short notes on any five of the following: (a) E. commerce; (b) Scientific office management; (c) Supervising office employees; (d) Job evaluation method; (e) Indexing; (f) Office attendance; and (g) Training and motivation of employees.

[Marks: (5 x 4) = 20]

= THE END =

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CMA APRIL, 2010 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; the notations refer to usual meanings. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

PART – A : BUSINESS MATHEMATICS

Q. No. 1. (a) Let U = {1, 2, 3, 4, 5, 6, 7, 8}, A = {1, 3, 5, 7}, B = {2, 4, 6, 8} and C = {2, 3, 4, 5} Find the following sets: (i) A B, (ii) B∩C, (iii) A-B, (iv) B ∩C (b) Solve the linear equations 2x + 3y = 5, 3x – 2y = 1 and state the geometrical meaning of the solution.

[Marks: (4+6) = 10] Q. No. 2.

(a) For what value of k will be the quadratic equation -

X2 – (3k-1)x + (2k2+2k-11) = 0 have equal roots?

(b) Prove that - 2(sin6 + cos6) – 3(sin4 + cos4) + 1 = 0. [Marks: (5+5) = 10]

Q. No. 3. (a) Find the present value of Taka 5,000 due 5 years from now if interest is at 4% compounded

semi-annually. (b) Find the equation of the straight line passing through the intersection of the straight lines 4x – 3y – 1 = 0, 2x – 5y + 3 = 0 and parallel to the line 4x + 5y = 6.

[Marks: (5+5) = 10]

Q. No. 4. Work out the following:

(i) dtcos2t t

e

(ii) e

1

dxlogx (iii)

5

23

2

dxx1

3x

[Marks: (3+3+4) = 10] Q. No. 5. (a) How many different words can be formed from the letters of the word “ALGEBRA” taken 3 at

a time? (b) Solve for x

logx3 + logx9 + logx729 = 9 [Marks: (6+4) = 10]

Q. No. 6. (a) Differentiate the followings with respect to x

(i) y = log 34 x (ii) y = xe

2x

(b) The total cost function of a firm is C = 3

1x3 – 5 x2 + 28x + 10, where C is the total cost and x is

output. A tax rate of Tk.2 per unit of output is imposed and the producer adds its to his cost. If the market demand function is given by P = 2530 – 5x, where P is the price per unit of output, find the maximizing output and price.

[Marks: (5+5) = 10]

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CMA APRIL, 2010 EXAMINATION FOUNDATION LEVEL SUBJECT: 003. QUANTITATIVE TECHNIQUES.

Q. No. 7. (a) Solve the following system of linear equations by matrix method–

x + y + z = 6 5x – y + 2z = 9 3x + 6y – 5z = 0

(b) If x = tan + sec show that - Sin = 1x

1x2

2

[Marks: (5+5) = 10]

PART – B : BUSINESS STATISTICS Q. No. 1. (a) Point out the difference between absolute and relative variation. (b) The prices of a Pharmaceuticals Company shares in Dhaka Stock Exchange (DSE) and

Chittagong Stock Exchange (CSE) during the last ten months are recorded below:

Month DSE CSE Month DSE CSE January 105 108 June 127 125 February 120 117 July 109 125

March 115 120 August 110 120 April 118 130 September 104 110 May 130 100 October 112 135

Determine the arithmetic mean and standard deviation of the prices of shares. In which market the share prices are stable?

[Marks: (3+7) = 10]

Q. No. 2.

(a) Discuss the distinctive features of the binomial, passion and normal distributions. When does a binomial distribution trend to become a normal distribution?

(b) A wholesale distributor of fertilizer products finds that the annual demand for one type of fertilizer is normally distributed with a mean of 120 tones and standard deviation of 16 tones. If he orders only once a year, what quantity should be ordered to ensure that there is only a 5 percent chance of running short?

[Marks: (5+5) = 10]

Q. No. 3. (a) What is business forecasting? What are the assumptions on which business forecasting are

made? (b) Calculate the trend values by the method of least squares from the following data given and

estimate the sales for the year 2008:

Year 2000 2001 2002 2003 2004 Sale of Tibet Beauty Soap (in million) 12 18 20 23 27

[Marks: (4+6) = 10]

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CMA APRIL, 2010 EXAMINATION FOUNDATION LEVEL SUBJECT: 003. QUANTITATIVE TECHNIQUES.

Q. No. 4. (a) Explain what do you understand by the ‘mathematical expectation’. How is it useful for a

businessman? Give an example to illustrate its usefulness. (b) A factory finds that, on average, 20% of the bolts produced by a given machine will be

defective for certain specified requirements. If 10 bolts are selected at random from the day’s production of this machine, find the probability (i) that exactly 2 will be defective, (ii) that 2 or more will be defective, and (iii) that more than 5 will be defective.

[Marks: (4+6) = 10]

Q. No. 5. (a) Define correlation. Explain correlation co-efficient r = 0, r = -1, r = 1. (b) Experience and efficiency score of 8 workers are given below:

Experience (X) 16 14 17 6 4 5 10 3 Efficiency (Y) 23 21 22 16 18 19 18 20

Calculate the co-efficient of correlation and comment on the result. [Marks: (3+7) = 10]

Q. No. 6.

(a) Explain type-I error and type-II error.

(b) Suppose you are a buyer of large suppliers of light bulbs. You want to test at the 5% significance level, the manufacturer claims that his bulbs last more than 800 hours. You test 36

bulbs and find that the sample mean X is 8.16 hours and sample standard deviation = 70 hours. Should you accept the claim?

[Marks: (3+7) = 10] Q. No. 7.

(a) Define standard deviation and co-efficient of variation.

(b) The life of tube bulbs of two different companies are given below:

No. of bulbs Life (in hours) Company – A Company – B

1000 – 1200 18 15 1200 – 1400 22 24 1400 – 1600 26 30 1600 – 1800 25 20 1800 – 2000 9 16

(i) Which company’s bulbs give a higher average life?

(ii) If the prices are same for the bulbs of both companies, which one you will purchase and why?

[Marks: (3+7) = 10]

= THE END =

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FOUNDATION LEVEL

SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS.

Time: Three hours Full Marks: 100 Answer FIVE questions taking at least TWO from each Group “A” and “B”. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

GROUP – A : BUSINESS ECONOMICS

Q. No. 1. (a) What is the difference between average cost and marginal cost? Explain why marginal cost is

important for management decisions. (b) Fill out the tables below with applicable amount:

Quantity (Q) Fixed Cost (FC)

Variable Cost (VC)

Total Cost (TC)

Marginal Cost per unit

Average Cost per unit

0 550 - - - 550 1 - 300 850 - - 2 550 - - 250 - 3 - 750 - - - 4 - - 1,600 - - 5 550 - - - 420

(c) Explain when a firm may operate at loss. [Marks: (8+8+4) = 20]

Q. No. 2. (a) What are the monetary policy and fiscal policy? How those policies are important to managerial

decisions? (b) Define the followings with relevant examples:

(i) Opportunity cost. (ii) Accounting cost. (iii) Economic cost.

(c) What are the differences between oligopoly market & monopolistic market? Give real life examples from Bangladeshi markets.

[Marks: (8+6+6) = 20]

Q. No. 3. (a) If the Bangladeshi Taka Depreciates 20 percent how this affect the export and import of a

Bangladeshi manufacturer? (b) What are the good and bad effects of inflation on the economy? (c) How does Central Bank of a country control inflation?

[Marks: (6+8+6) = 20]

Q. No. 4. (a) What are the determinants of demand? (b) What are the types of elasticities of demand? What is the implication of elasticity of

demand for Business? (c) Calculate price elasticity, income elasticity, and cross elasticity from the following

figures: Year Sales in Qty of X No. Price per unit of X

in Tk. Price per unit of

Y in Tk. Per Capita

income in Tk. 2000 30,000 30 15 20,000 2009 50,000 20 20 30,000

[Marks: (5+7+8) = 20]

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CMA APRIL, 2010 EXAMINATION FOUNDATION LEVEL SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS. Q. No. 5. (a) What are the advantages of national income as a measure of economic performance of a

country? What are its limitations as indicator of well being of a nation? (b) How is national income measured in Bangladesh? (c) From the following data calculate National Income:

Taka in croresCompensation of employees - 1866.3Business interest payment - 264.3Rental income of persons - 34.1Corporate Profits - 164.8Proprietor’s income - 120.3Corporate Dividends - 66.4Social Security contribution - 253.0Personal taxes - 402.1Interest paid by consumer - 64.4Interest paid by Govt. - 105.1Govt. and business transfers - 374.5Personal consumption expenditure - 1991.9

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

GROUP – B : INTERNATIONAL BUSINESS

Q. No. 6. (a) What is international business? What are the alternative forms of international business? (b) How global strategy is different from multi-domestic strategy? Give real life examples. (c) In the context of trade liberalization explain your view on “Infant Industry Argument”.

[Marks: (6+8+6) = 20]

Q. No. 7. (a) Explain the theory of comparative advantages. Do you think the theory is still important in

today’s world context? (b) What are the factors that influence Foreign Direct Investment?

[Marks: (12+8) = 20]

Q. No. 8. (a) What do you mean by the term back to back letter of credit? (b) What is the mode of exports financing in Bangladesh? (c) What are the advantages and disadvantages of pre-shipment inspection in Bangladesh? (d) What are the main problems faced by the Exporting firms of Bangladesh in doing their

business? [Marks: (5+5+5+5) = 20]

= THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL, 2010 EXAMINATION

PROFESSIONAL LEVEL-I SUBJECT: 101. INTERMEDIATE FINANCIAL 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) How the direct and indirect methods differ in their approach to computing the cash provided by

operating activities? (b) The following are the Balance Sheets of Moonlight Ltd. as at 30 June 2009 and 2008:

Assets 2009 (Taka)

2008 (Taka)

Liabilities and Equity 2009 (Taka)

2008 (Taka)

Cash in Hand 80,00,000 70,00,000 Accounts Payable 1,01,50,000 95,50,000 Trade Debtors 1,12,80,000 1,16,80,000 Income Tax Payable 3,00,000 5,00,000 Stock in Trade 1,85,00,000 1,71,50,000 Dividend Payable 8,00,000 9,00,000 Fixed Assets 3,30,70,000 2,96,70,000 Finance Lease Obligations 40,00,000 ………… Accumulated Depreciation (1,16,50,000) (1,04,00,000) Share Capital 50,00,000 50,00,000 Investment in B Ltd 30,50,000 27,50,000 Share Premium 1,50,00,000 1,50,00,000 Loan Receivable 27,00,000 ………… Un-appropriated Profit 2,97,00,000 2,69,00,000

Total 6,49,50,000 5,78,50,000 6,49,50,000 5,78,50,000

Additional Information: (i) On 30 June 2008, Moonlight Ltd. acquired 25% shares of B Ltd. for Tk.27,50,000. On that date

the carrying value of B’s assets and liabilities, approximately their fair value was Tk.1,10,00,000. B Ltd. reported income of Tk.12,00,000 for the year ended 30 June 2009.

(ii) During financial year 2009, Moonlight lent Tk.30,00,000 to Sunlight Ltd. Sunlight paid the 1st installment (including interest) of Tk. 3,00,000 on 1st April 2009.

(iii) On 2 July 2008, Moonlight Ltd. sold equipment costing Tk.6,00,000 with a carrying amount of Tk.3,50,000 for Tk.4,00,000.

(iv) On 30 June 2009, Moonlight Ltd entered into finance lease for machinery. The PV of the rental payment is Tk.40,00,000 which equals the fair value. Moonlight Ltd. made the first rental payment of Tk.6,00,000 when due on 2 July 2009.

(v) Net Income for the year 2009 was Tk.36,00,000. (vi) Moonlight Ltd. declared and paid cash dividend as follows:

Head 2009 2008 Declared 15 June 2009 15 June 2008 Paid 30 August 2009 30 August 2008 Amount Tk.8,00,000 Tk.9,00,000

Required: Prepare the cash flow statement following the IAS-7 (indirect basis). Also show your workings.

[Marks: (5+15) = 20]

Q. No. 2. (a) What effect would the use of the LIFO inventory method have upon the applicability of the

gross profit method of valuing inventory? (b) The Ainge Company values its perpetual inventory at the lower of FIFO cost or market. The

inventory accounts at December 31, 2009 had the following balances:

Taka Raw Materials 81,000 Allowance of Reduce Raw Material Inventory from cost to market 5,700 Work in Process 1,31,520 Finish Goods 2,05,200

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 101. INTERMEDIATE FINANCIAL ACCOUNTING. Q. No. 2. (Contd..)

The following are some of the transactions that affected the inventory of the Ainge Company during 2009: Feb 10 Purchased raw materials at an invoice price of Tk.30,000; term 3/15, n/30 Ainge

Company uses the net method of valuing inventories. Mar 15 Ainge Company repossessed an inventory item from a customer who was overdue in

making payment. The unpaid balance on the sale was Tk.175. The repossessed merchandise is to be refinished and placed on sales. It is expected that the item can be sold for Tk.250 after estimated refinishing cost of Tk.50. The normal profit for this item is considered to be Tk.40.

Apr 01 Refinishing costs of Tk.55 are incurred on the repossessed item. Apr 10 The repossessed item is resold for Tk.250 on account; 20% down. May 30 A sales on account is made of finished goods that have a list price of Tk.740 and a

cost of Tk.480. A reduction from the list price of Tk.100 is granted as a trade-in allowance. The trade-in item is to be priced to sell at Tk.80 as is. The normal profit on this type of inventory is 25% of the sales price.

Nov 30 Ordered materials to be delivered January 31, 2010, at a cost of Tk.21,600. No discount terms were included.

Dec 31 The following information was available to adjust the accounts for the annual statements:

(a) The Market value of items ordered on November 30 had declined to tk.18,000. (b) The raw material inventory account had a cost balance of Tk.1,10,400. Current market

value was Tk.1,01,400. (c) The finished goods inventory account had a cost balance of Tk.1,77,600. Current market

value was Tk.1,89,000. Required: Record this information in Journal entry form, including any required adjusting entries at December 2009.

[Marks: (5+15) = 20]

Q. No. 3. (a) What are the general rules for recording gains and losses on retirement of Plant Asset? (b) Plant acquisitions for selected companies are as follows:

(i) B.Co. acquired land, building and equipment from a bankrupt co. for a lumpsum price of Tk.700,000. At the time of purchase, the seller had the following book and appraisal values:

Head Book value Appraisal valueLand Tk.200,000 Tk.150,000Buildings 250,000 350,000Equipment 300,000 300,000

(ii) H. Enterprise purchased stores equipment by making a Tk.2,000 cash down payment and signing a one year, Tk.23,000, 10% note payable.

(iii) Kim Co. purchased office equipment for Tk.20,000, terms 2/10, n/30. The company policy was to take the discount facility.

(iv) Kissam Co. received at zero cost a piece of land fro a donor. The appraisal value of the land is Tk.27,000.

(v) Zabed Traders built a warehouse for Tk.600,000. It could have purchased the building for Tk.740,000.

Required: Prepare the entries that should be made at the date of each acquisition. (c) 10 year bonds at par valued of Tk.800,000 dated January 1, 2006 bearing interest @ 10%

payable semi-annually on January 1, and July 1, are issued on March 1, 2006, at Tk.102 plus accrued interest. Give entries on March 1, 2006.

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

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 101. INTERMEDIATE FINANCIAL ACCOUNTING. Q. No. 4. (a) How do you distinguish between cash basis accounting an accrual basis accounting? How does

accrual basis affect year-end closing? (b) Prime Business Company presented their financial statements for one year to 30 June 2000 to

their auditors. The audit assistant made the following comments in respect of the income statement. (i) Closing inventory excluded one consignment of Tk. 50,000 shipped to a foreign buyer

early June. But the buyer is not expected to receive goods before August 2000. (ii) Inventory included Tk. 60,000 being cost of goods sent to an Indian merchant under

consignment agreement. The consignee did not send account sale in respect of the consignment.

(iii) Inventory included goods worth Tk. 40,000 which were sold but still lying in a separate room under lock and key. The key of the store was with the buyer.

(iv) While doing physical inventory no recognition was made of goods costing of Tk. 20,000 stolen from the warehouse. The insurer accepted a claim of Tk. 15,000 against this.

(v) No depreciation was charged in respect of an equipment sold in early June 2000 at Tk. 80,000. Cost of the equipment was Tk. 500,000 and accumulated depreciation associated with it was 400000 up to June 1999. The company recognized a loss of Tk. 20,000 on the sale transaction. The company charges depreciation @ 10% on its equipment. 50% of depreciation is charged to factory overhead and 50% to administration cost.

(vi) Advanced made during the year to a research firm the tune of Tk. 100,000 remained unadjusted though the firm submitted its report within June and was paid balance amount of Tk. 50,000 (this amount was properly charged to revenue expenses).

(vii) Taka 52,000 received as sales advance was recorded in the books as sales. (viii) Taka 200,000 received from one of the retired President of the constitute a staff

benevolent fund was recognized as other income. (ix) Interim divided of 10% declared and paid on 500,000 shares of Tk. 10 each was charged

to Income Statement as expense. (x) Bank charge of Tk. 2,700 was not taken into account. (xi) A cheque of Tk. 25,000 issued to a creditor in October 1999 is still outstanding. The

creditor has request for a fresh cheque. (xii) The company reported a gross profit of Tk. 2,220,000 and a net profit of Tk. 650,000.

Required: Prepare a statement showing how the points raised by the audit assistant will affect the Gross Profit and Net Profit.

[Marks: (5+15) = 20] Q. No. 5.

(a) What are the similarities and difference among the terms depreciations, depletion and amortization?

(b) The Monalisa Co. Ltd. was organized in September, 2001 with an authorized capital stock of 200000 shares of 1% cumulative preferred stock with Tk. 40 par value and 1000000 shares of no par common stock with Tk. 30 stated value. During the rest of the year, the following transactions relating to capital stock were completed.

Oct. 1 Subscriptions were received for 300000 shares of common stock at Tk. 42 and

payable Tk. 22 down and the balance in two equal installments due in November-1 and December-1. On the same date 16500 shares of common stock were issued to Mr. Williams in exchange for his business. Assets transferred to company were valued as follows:

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 101. INTERMEDIATE FINANCIAL ACCOUNTING. Q. No. 5. (Contd..)

Land – Tk. 210,000, Buildings – Tk. 250,000, Equipments – Tk. 50,000, and Merchandise – Tk. 110,000. Liabilities of the business assumed by the company were: Mortgage payable Tk. 41,000, Accounts payable – Tk. 11,000, Accrued interest on the mortgage – Tk. 550. No goodwill is recognized in recording the issuance of the stock for net assets.

Oct 3 Subscriptions were received for 120000 shares of preferred stock at Tk. 45, payable Tk. 15 down and the balance in two equal installments due November- 1 and December – 1.

Nov. 1 Amounts due on this date were collected from all common and preferred stock.

Nov. 2 Subscriptions were received for 480000 shares of common stock at Tk. 44, payable Tk. 22 down and the balance in two equal installments due on December – 1 and next January – 1, (2002).

Dec. 1 Amounts due on this date were collected from all common stock subscribers and stock fully paid for was issued. The final installment on preferred stock subscription was received from all subscribers except on whose installment due on this date was Tk. 9,000. State corporation laws provide that the company is liable for the return to the subscriber of the amount received less the loss on the subsequent resale of the stock. Preferred stock fully paid for was issued.

Dec. 6 Preferred stock defaulted on December – 1 was issued for cash at Tk. 36 each stock was issued and settlement was made with the defaulting subscriber.

Required: Journal entries to record the transactions listed above. [Marks: (5+15) = 20]

= THE END =

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PROFESSIONAL LEVEL-I SUBJECT: 102. COST ACCOUNTING.


Q. No. 1.

(a) Jubayer Company sells a number of products to many restaurants in the area. One product is a special meat cutter with a disposable blade. Blades are sold in a package of 12 blades at Tk. 20 per package. It has been determined that the demand for the blades is at a constant rate of 2,000 packages per month. The packages cost to the company is Tk. 10 each from the manufacturer and require a three-day lead time from date of order to date of delivery. The ordering cost is Tk. 1.20 per order, and the carrying cost is 10% per annum. The company uses the economic order quantity formula.

Required: (i) Compute the economic order quantity. (ii) Compute the number of orders needed per year. (iii) Compute the cost of ordering and of carrying blades for the year.

(b) The following information has been gathered with regard to material X: Normal monthly uses 1,400 unit Maximum anticipated monthly uses 2,000 units Minimum anticipated monthly uses 600 units Delivery period from suppliers: Maximum: 4 months, Normal: 3 months, Minimum: 2 months. Economic order quantity 6,000 units.

Required: (i) Reorder level. (ii) Maximum stock level. (iii) Minimum stock level.

[Marks: (15+10) = 25]

Q. No. 2.

(a) What is the purpose of cost of production report?

(b) Rainbo Company uses process costing in accounting for its production department, which uses two materials. Material A is added at the beginning of the process. Inspection is at the 90% stage. Material B is then added to the good units. Normal spoilage units amount to 5% of good output. Company records contain the following information for January 2010. Started during the period 10,000 units Material A Tk. 13,370 Material B Tk. 4,500 Direct labor cost Tk. 37,580 Factory overhead Tk. 46,975 Transfer to finished goods 7,000 units Ending inventory (95% complete and include all material B) 2,000 units

Required:

Prepare a cost of production report. [Marks: (5+15) = 20]

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 102. COST ACCOUNTING.

Q. No. 3.

(a) What is the purpose of an incentive wage plan?

(b) For the first week in March, the record of J. Rahat shows: Hours Worked Units Produced Monday 8 90 Tuesday 8 100 Wednesday 8 110 Thursday 8 112 Friday 8 96

Rahat’s hourly wages rate is Tk. 6 and standard production is 12 units per hour. Factory overhead per labor hour is Tk. 3.

Required:

(i) If Rahat receives 90% of the labor value of time saved during a day, prepare a schedule to show Rahat’s pay, using the following headings: Day Premium wage Units Produced Total Pay Daily Wage Labor Cost per Unit Units Above Standard Overhead per Unit Hours Saved Conversion Cost per Unit

(ii) If 100 percent bonus plan is used (for each week’s total production), prepare a schedule to show Rahat’s pay, using the following headings: Hours Worked Base x Efficiency Ratio Units Produced Week’s Earnings Standard Production Labor Cost per Unit Efficiency Ratio (nearest %) Base Wage Conversion Cost per Unit

(iii) If the daily quota of standard production is 96 units and the hourly rate increases 5% for total wages for each day of quota production and above, prepare a schedule to show Rahat’s pay, using the following headings: Day Amount Earned Units Produced Labor Cost per Unit Hourly Wage Conversion Cost per Unit

[Marks: (2+18) = 20]

Q. No. 4.

(a) Tampa Office Equipment manufactures and sells metal shelving. It began operations on January 1, 2004. Costs incurred for 2004 are as follows (V stands for variable; F stands for fixed):

TakaDirect material costs 140,000 VDirect manufacturing labour costs 30,000 VPlant energy cost 5,000 VIndirect manufacturing labour costs 10,000 VIndirect manufacturing labour costs 16,000 FOther indirect manufacturing costs 8,000 VOther indirect manufacturing costs 24,000 FMarketing, distribution and customer service costs 122,850 VMarketing, distribution and customer service costs 40,000 FAdministrative costs 50,000 F

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 102. COST ACCOUNTING. Q. No. 4. (Contd..)

Variable manufacturing costs are variable with respect to units produced. Variable marketing, distribution and customer service costs are variable with respect to units sold.

Inventory data are:

Beginning, January 1, 2004 Ending, December 31, 2004

Direct material 0 lb 2,000 Ibs

Work in process 0 unit 0 unit

Finished goods 0 unit ? units

Production in 2004 were 100,000 units. Two pounds of direct materials are used to make one unit of finished product.

Revenues in 2004 were Tk.436,800. The selling price per unit and the purchase price per pound of direct materials were stable throughout the year. The company’s ending inventory of finished goods is carried at the average unit manufacturing costs for 2004. Finished goods inventory at December 31, 2004, was Tk.20,970.

Required: (i) Calculate direct materials inventory, total cost, December 31, 2004.

(ii) Calculate finished goods inventory, total units, December 31, 2004.

(iii) Calculate selling price per unit for 2004.

(iv) Calculate operating income for 2004.

[Marks: (5 x 4) = 20]

Q. No. 5.

(a) What do you mean by predetermined overhead rates? ‘Selection of right base is important to have right predetermined overhead rates’ – explain critically.

(b) There are 5 Rs’ in material management. What these 5Rs’ stand for? Discuss shortly.

(c) Write short notes on the following:

(i) Zero Based Budget.;

(ii) Perpetual Inventory;

(iii) Buffer Stock. [Marks: (5+4+6) = 15]

= THE END =

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PROFESSIONAL LEVEL-I

SUBJECT: 103. MANAGEMENT AND MARKETING MANAGEMENT.

Time: Three hours Full Marks: 100 Answer any THREE questions from each part. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

PART – A : MANAGEMENT (TOTAL MARKS-50)

Q. No. 1.

(a) What do you mean by Management? Explain with example.

(b) To be a successful Manager you must play some certain roles. Do you agree? If yes then explain the roles.

(c) What are the basic skills to be a good Manager? Explain.

[Marks: (4+4+8) = 16]

Q. No. 2.

(a) Define Managerial Ethics. What is the area of social responsibilities of an organization? Explain.

(b) There are so many arguments for and against social responsibilities. What are they? Explain.

[Marks: (8+8) = 16]

Q. No. 3.

(a) Clarify the concepts of operational, financial and strategic control.

(b) Discuss the techniques of controlling quality, cost and productivity.

(c) What are the benefits of TQM?

[Marks: (5+6+5) = 16]

Q. No. 4.

(a) Who is a leader and who is a manager? And who is both, a leader and a manager?

(b) Discuss the emerging approaches to leadership.

(c) Explain the nature of political behavior in an organization.

[Marks: (5+6+5) = 16]

Q. No. 5.

(a) What do you mean by strategic planning?

(b) How would you formulate corporate level strategy and business level strategy?

[Marks: (8+8) = 16]

Two marks are reserved for neatness and relevance

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 103. MANAGEMENT AND MARKETING MANAGEMENT.

PART – B : MARKETING MANAGEMENT (TOTAL MARKS-50)

Q. No. 6.

(a) What is Marketing Management?

(b) Define Marketing Mix. What are the 4P’s associated with it?

(c) Differentiate between customer’s profitability and a profitable customer.

[Marks: (4+4+8) = 16]

Q. No. 7.

(a) What are the differences between selling and marketing?

(b) What is Target Market? Do you think that only a target can satisfy a firm to sell its product or service? Explain.

(c) What do you mean by Customer’s Value and customer’s satisfaction?

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

Q. No. 8.

(a) Why SWOT analysis is necessary?

(b) Discuss the methods of SWOT analysis.

(c) What are the limitations of SWOT analysis?

[Marks: (5+6+5) = 16]

Q. No. 9.

(a) What is meant by marketing strategy?

(b) What factors are considered in developing marketing strategies for a particular concern?

(c) How can you design global marketing strategies for a multinational company?

[Marks: (5+6+5) = 16]

Q. No. 10.

(a) What is product life cycle?

(b) Illustrate with diagram showing the most viable state of the entrepreneurs.

[Marks: (8+8) = 16]

Two marks are reserved for neatness and relevance

= THE END =

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CMA APRIL-2010 EXAMINATION PROFESSIONAL LEVEL-I

SUBJECT: 104.INFORMATION TECHNOLOGY.

Time : 2 hours 30 minutes Full Marks : 80

Questions are of equal marks. Answer any FOUR questions. Answer must be brief, relevant, neat and clean. These questions carry 80 marks (Part – A) and balance 20 marks (Part – B) is for practical test

(to be taken later on). Q. No. 1. (a) Discuss the Enterprise Resource Planning (ERP) and process of ERP usage in manufacturing

firms. What factors are depend in a successful ERP Implementation? (b) Measure the ERP for Information Technology and the application of ICT for better decision

making in a e-Governance. (c) Why SAP is the best ERP Software?

[Marks: (8+8+4) = 20] Q. No. 2. (a) What is system Development Life Cycle? What are the roles of a finance manager in perfect

designing of Management Information System (MIS) application of an organization by the IT persons?

(b) What is feasibility? Name and describe each of the three major areas of feasibility for information system?

[Marks: (10+10) = 20] Q. No. 3. (a) What is a dual-core processor? What advantages does it offer to its user? (b) Briefly discuss several data-storage issues that face the modern organization. (c) If cost were not issue, describe the characteristics of your ideal computer. What would you use

it for? Would you choose a handheld, portable, desktop or workstation computer. Why? [Marks: (6+6+8) = 20]

Q. No. 4. (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 new tools and technologies can make database more accessible and useful? (d) Explain in brief the differences between the “File Management System” and “Database

Management System”. [Marks: (4 x 5) = 20]

Q. No. 5. (a) What is the difference between system analysis and system design? (b) What is the difference between a logical and a physical view of data? (c) What is the difference between E-Commerce and E-business? (d) What is the difference between “Privacy” and “Fair Information Practice”?

[Marks: (4 x 5) = 20] Q. No. 6. Write short notes on: (a) Electronic Financial Accounting; (b) Data Warehousing; (c) Digital market; (d) Computer Waste; (e) Expert System.

[Marks: (5 x 4) = 20] = THE END =

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PROFESSIONAL LEVEL-II SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I.


Q. No. 1. (a) For a large construction work, which will last four years, management proposes to show

profit/loss on work-in-progress every year. Do you advocate this idea? If so, what precautionary steps would you suggest in providing such profits?

(b) When may profit and losses on construction contracts first be recognized? How does recognition of a profit on a construction contract differ from the recognition of a loss?

(c) The following particulars relate to two houses which a firm of builders had in course of construction under contract:

Particulars House A Tk.

House B Tk.

Work-in-progress on 1st January, 2009 excluding of Tk.8000 estimated profit which was taken to Profit & loss account in 2008

140,000

-Materials purchased 230,000 166,000Wages 200,000 140,000Electrical services and fittings 14,000 3,000Road making charges 80,000 -Contract prices (including road making) 600,000 400,000Cash received upto 31st December 2009 600,000 240,000Percentage of cash received to work certified 100% 66.67%Value of materials in hand on 31st December 2009 4,000 5,400Completed work not certified - 25,000Value of plant used on sites 120,000 60,000Period of plant remained on sites during the year 10 months 8 months

The total establishment expenses incurred during the year 2009 amounted to Tk.122,400. These are to be charged to the two contracts in proportion to wages. Depreciation of plant is to be taken into account at the rate of 10% per annum.

Prepare the contract accounts (in columnar form) showing the profit or loss on each house for the year 2009 and the sums which you consider appropriately transferable to the profit and loss account.

[Marks: (5+5+15) = 25] Q. No. 2. (a) What are the general criteria for recognizing revenues in the Financial Statements? (b) The Empire Cosmetics Ltd. invoices goods to their various branches at cost, and the branches

sell on credit as well as for cash. Following are the details relating to the Chittagong branch:

Accounts Receivable, 1 January 2009 262,000Accounts Receivable, 31 December 2009 331,000Cash on hand, 1 January, 2009 3,000Inventory, 1 January, 2009 150,000Inventory 31 December, 2009 139,000Goods received from Home Office 508,000Cash received from Home Office 15,000Goods returned to Home Office 7,000

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I.

Q. No. 2. (Contd..)

Sales: Cash 335,000Credit 600,000

Allowances to customers 3,200Return from customers 5,800Discount allowed to customers 24,000Bad debts 6,000Cash sent to Home Office 749,000Rent and Rates 18,000Wages and Salaries 60,000General Expenses 13,000Wastages: Normal loss 12,000Abnormal loss of goods due to pilferage 30,000

Required: Prepare the following accounts in the Home Office books: (i) Branch Accounts Receivable Account. (ii) Branch Cash Account. (iii) Branch Income Statement.

[Marks: {5+(5+5+10)} = 25]

Q. No. 3. (a) Explain briefly the proper accounting treatment for recognizing currently a change in

accounting principle. (b) The following details were available regarding the affairs of Emacol Ltd. as at 31 December

2009 when the company was contemplating filing a petition for liquidation or reorganization:

Heads Taka Accounts payable 97,500 Mortgage Notes payable 100,000 Bank Notes payable 16,000 Cash in hand 2,000 Cash at Bank 2,100 Notes Receivable 12,000 Accounts Receivable (estimated collectible value: Tk.14,000) 23,500 Wages and Salaries due to 3 employees 6,750 Interest payable – Bank Notes 550 Interest payable – Mortgage Notes 4,250 Inventories – Finished Goods 28,000 Inventories – Work in Progress 12,000 Inventories – Raw Materials 19,500 Prepaid Insurance (estimated recovery value: Tk.300 600 Investment in Stock 13,250 Capital Stock 125,000 Retained Earnings (deficit) (70,600) Land (appraised value: Tk.20,000) 21,000 Buildings – Net (appraised at Tk.50,000) 99,000 Plant and Machinery–Net (estimated disposal value: Tk.19,000) 46,500

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Q. No. 3. (Contd..) Additional Information: (a) The Notes Receivable are expected to be fully realized, and they have been pledged as

collateral on a Bank Note in the principal amount of Tk.10,000 plus interest payable of Taka 300.

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

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

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

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

[Marks: (5+20) = 25] Q. No. 4. (a) How does rebate on bills discounted arise and how is it brought into record? Explain this with a

suitable example. (b) From the following Trial Balance as on 31.12.09 and other details of a Private Bank Ltd. draw

the Balance Sheet as at that date and a Profit and Loss Account for the year ended on that date: Debits: Tk. Credits : Tk. Share Capital 10,00,00,000Bills Purchased: Reserves 7,00,00,000Payable in Bangladesh 2,00,00,000 Fixed Deposits 20,00,00,000Payable outside the Bangladesh 1,00,000 Saving Deposit 15,00,00,000Debts due by Directors or Officers: Either severally or jointly with other person fully secured

1,50,00,000

Provident Fund 1,00,00,000

Debts considered good for which The bank holds no other security than the debtor’s personal security

1,00,00,000

Current Deposits 27,00,00,000

Cash with other banks in C/A 10,47,40,000 Contingent Accounts 3,00,00,000Debts considered good secured by personal liability of parties in addition to that of debtors

2,00,00,000

Bills Payable (Drafts) 40,00,000

Doubtful Debt. (provision to be made) 2,00,000 Bills Receivable for collection: Building at cost 2,00,00,000 Payable in Bangladesh 3,00,00,000Debts due by companies in which the Directors are interested fully secured

42,60,000

Payable outside Bangladesh 10,00,000

Furniture and fixtures at cost 40,00,000 Depreciation Fund on Buildings 60,00,000Land and building acquired in satisfaction of claims at cost

5,00,000

Depreciation Fund on Furniture etc.

10,00,000

Bills receivable for collection: Payable in Bangladesh

3,00,00,000

Profit and Loss A/C 60,00,000

Payable outside Bangladesh 10,00,000 Interest 1,80,00,000Loans considered good, fully secured

41,64,00,000Discount 47,00,000

Bills Discounted: Payable in Bangladesh

3,00,00,000

Commission 40,00,000

Payable outside Bangladesh 4,00,000 Exchange 2,00,000

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Q. No. 4. (Contd..)

Cash with Bangladesh bank 3,00,00,000 Brokerage 9,00,000Loans to banks: Fully secured 1,60,00,000 Rent 5,00,000Cash in hand 7,00,00,000 Share Transfer Fees 10,000Government of BD. Bonds(face value Tk. 85,000,000)

7,95,00,000

Sundry receipts 90,000

States loan bonds (F.V. Tk. 10000000)

95,00,000

Ordinary Shares: Fully paid up 20,00,000 Partly paid up 10,00,000 (Uncalled amount Tk. 500,000)

30,00,000

Money at call & short Notice 50,00,000 Interest accrued on Investments 10,00,000 Interest paid on deposits 60,00,000 Traveling Allowance 1,00,000 Chairman’s remuneration 4,50,000 Salaries and Allowances 60,00,000 Stationary and Printing 5,00,000 Director’s Fees and allowances 2,00,000 Advertisements etc. 3,00,000 Provident Fund Contributions (other than Chairman)

2,50,000

Depreciation 3,00,000 Rent and Taxes 6,00,000 Audit Fees 4,00,000 Insurance 1,00,000 Electric Charges 2,00,000 Law Charges 1,00,000 Postage, Telegrams & Telephone 3,00,000

-----------------

-----------------Total Debit 90,64,00,000 Total Credit 90,64,00,000

The following information is available: (a) Maximum amount of loan to Directors and Officer and to companies etc. in which Directors are

interested are Tk. 200 lakh and Tk. 60 lakh respectively. (b) The Bank declares 6% dividend for the year ending 31st December, 2008 on called up capital of

20000000 shares at Tk. 500 (Face Value Tk. 1000). All the authorised capital was issued and subscribed.

(c) In addition to dividend Tk. 20 lakh and Tk. 10 lakh were appropriated towards reserve for contingencies and Bonus respectively. Balance in Profit and Loss account of 1.1.09 was Tk. 15000000.

(d) In 2009 Buildings and Furniture costing Tk. 2000000 and Tk. 500000 respectively were acquired. Furniture (cost Tk. 100000) was sold for the same amount.

(e) Tk. 2000000 is to be provided for taxation from current year income. (f) On 31.12.09 Tk. 500000 Bills Discounted (accompanied by documents of title) are on behalf of

Directors. (g) Acceptances on behalf of clients on that day amount to Tk. 5000000. (h) Tk. 9500000 Government of Bangladesh Bonds (F.V. Tk. 10000000) represent Provident Fund

Investment. [Marks: (5+20) = 25]

= THE END =

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PROFESSIONAL LEVEL-II SUBJECT: 202. MANAGEMENT ACCOUNTING.


Q. No. 1. (a) What is Total Quality Management (TQM)? At what point can a firm consider that TQM is

achieved? (b) What roles do management accountants play in TQM? (c) Which of the following cost categories tend to increase during the early years of TQM? Which

of these tend to decrease over the years due to successful TQM? Explain why? (i) Prevention; (ii) Appraisal; (iii) Internal failure; (iv) External failure.

[Marks: (5+3+12) = 20]

Q. No. 2. (a) What is activity-based costing and how can it improve the costing system of an organization? (b) Describe activity-based management. (c) Chemical Company uses a traditional two-stage cost allocation system. In the first stage, all

factory overhead costs are assigned to two production departments, A and B, based on machine-hours. In the second stage direct labour-hour are used to allocate overhead to individual products, Premium and Regular.

During 2009 the company has a total factory overhead cost of Tk.1,000,000. Machine-hours in production departments A and B were 4,000 and 16,000 hours, respectively.

The following information relates to products Premium and Regular for the month of January, 2009:

Premium Regular Units produced and sold 200 800 Unit cost of direct materials Tk.100 Tk.50 Hourly direct labour wage rate Tk.25 Tk.50 Direct labour-hours in department A per unit 2 2 Direct labour-hours in department B per unit 1 1

Chemical Company is considering implementing an activity-based costing system, its management accountant has collected following information for activity costs analysis:

Direct Consumption Activity Driver OH rate Premium Regular

Material No. of production 20 150 300 Movement Runs Machine setups No. of setups 800 25 50 Inspections No. of units 30 200 800 Shipment No. of shipment 20 50 100

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 202. MANAGEMENT ACCOUNTING.

Q. No. 2. (Contd..)

Required: (1) Calculate the unit costs for each of the two products under the existing traditional costing

system. (2) Calculate the unit costs for each of the two products if the proposed ABC system is adopted.

[Marks: {5+3+(6+6)} = 20]

Q. No. 3. The Diamond Cutting company requires 10 machine hours per unit in the Cutting Department. The following costs are assumed to be related to the operations of a cutting machine at a normal capacity of 10,000 units per year (with a maximum capacity of 12,000 units per year):

Variable costs: Electricity (10,000 units x 10 MH*/UNIT x Tk.5/MH) Tk.500,000 Repairs & maintenance (10,000 UNITS x 10 MH/unit x Tk.2/MH) 200,000

Fixed costs: Depreciation (Tk.2,000,000/5 years) 400,000 Insurance 100,000 Total costs at 10,000 units Tk.1,200,000

* MH = machine hours. Required: (a) What are the variable, fixed, and total costs per unit if the normal production of 10,000 units per

year is achieved? (b) What are the variable, fixed, and total cost per unit if only 8,000 units are produced per year? (c) What is the implication of producing less units (8,000 units) than normal capacity (10,000 units)

for managerial decision making? (d) Which costs are relevant and which costs are irrelevant to a decision to expand production from

normal capacity (10,000 units) to maximum capacity (12,000 units)? (e) Suppose a second cutting machine, identical in every respect to the first one, is under

consideration for possible purchase. Total production for the year is still expected to be equal to normal capacity (10,000 units with the first cutting machine accounting for 6,000 units and the second cutting machine accounting for 4,000 units. (i) What are the total costs of operating each of the two machines? (ii) What are the variable, fixed, and total costs per unit for each machine? (iii) What costs are relevant and what costs are irrelevant to the decision to acquire a second

cutting machine? (f) Under what condition would both the variable costs and fixed costs be relevant in a decision to

acquire a second cutting machine? [Marks: (2+3+3+3+6+3) = 20]

Q. No. 4.

(a) Identify the benefits that can result from reducing the setup time for a product.

(b) What is the margin of safety and why is it a useful concept for management?

(c) Define the term sales mix, and give an example to support your definition.

(d) Determine the level of sales a Company must attain to cover its fixed and variable costs, where the selling price is Tk.5, total fixed costs are Tk.160,000, and the contribution margin ratio is 40%.

Required:

Determine the Company’s break-even point in units and taka using the algebraic approaches. [Marks: (4+4+4+8) = 20]

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 202. MANAGEMENT ACCOUNTING. Q. No. 5. (a) How does zero-based budgeting differ from traditional budgeting? (b) Asad Box Fabrications manufactures boxes for workstations. The firm’s standard cost sheet and

the operating result of October 2009 are:

Standard cost per unit

Operating Result October 2009

Units 9,500 Sales Tk.50.00 Tk.551,000 Variable costs: Direct materials 5 pounds @ Tk.2.40 Tk.12.00 48,000 pounds x Tk.3 = Tk.144,000 Direct labour 0.5 hours @ Tk.14 per hour Tk. 7.00 4,800 hours x Tk.16 = Tk. 76,800 Variable manufacturing overhead Tk. 2.00 Tk. 19,000 Variable selling and Administrative expenses Tk. 5.00 Tk. 55,100 Total variable cost Tk.26.00 Tk.294,900 Contribution margin Tk.24.00 Tk.256,100 Fixed costs: Manufacturing costs Tk.50,000 Tk.55,000 Selling and administrative expenses 20,000 24,000 Total fixed costs Tk.70,000 Tk.79,000 Operating income Tk.177,100

In preparing the master budget for October 2009 the firm had several expected changes from the standard cost sheet. The sales price would increase by 8 percent. Its suppliers notified the firm that materials prices would increase by 5 percent starting October 1. The labor contract that started on October 1 increased wages and benefits by 10 percent. Fixed manufacturing costs would increase Tk.5,000 for insurance, property taxes, and salaries. For fixed selling and administrative expenses there would be a Tk.2,000 increase in managers’ salaries. Furthermore, the firm plans to spend an additional Tk.2,000 for advertising during October 2009. The unit sales for October 2009 was expected to be 10,000 units. Asad Box Fabrications uses JIT systems in all of its operations including materials acquisitions and product manufacturing.

Required:

(1) Prepare the master budget and flexible budgets at 9,500 units and at 11,000 units for October 2009.

(2) Compute the sales volume operating income variances, flexible budget operating income variance, sales price variances, and flexible budget variable cost variance for October 2009.

(3) Determine the direct materials prices variance, direct materials usage variance, direct labor rate variance, and direct labor efficiency variance.

[Marks: 4+ (7+4+5) = 20]

= THE END =

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PROFESSIONAL LEVEL-II SUBJECT: 203.COMMERCIAL & INDUSTRIAL LAWS.

Time : Three hours Full Marks: 100 Answer FIVE questions taking at least TWO from each group “A” and “B”. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

GROUP – A : COMMERCIAL LAW

Q. No. 1. Describe the basic elements of a valid contract.

[Marks: 20] Q. No. 2. (a) What is meant by free consent? (b) What situations may vitiate the legality of a contract as not being free?

[Marks: (3+17) = 20] Q. No. 3. (a) What do you understand for ‘performance of contract’? (b) What is the effect of refusal to accept performance by the promisee? (c) Discuss the different types of methods of Arbitration.

[Marks: (6+7+7) = 20] Q. No. 4. Under what circumstances a suit may be brought against the issuer of a cheque when the cheque has been dishonoured by a bank for insufficiency of fund in the respective account.

[Marks: 20] Q. No. 5. Write short notes on any four of the following. (a) Doctrine of caveat emptor; (b) bailment & pledge; (c) Condition and warranty (d) Proximate Causa; (e) Charter Party.

[Marks: (4 x 5) = 20]

GROUP – B : INDUSTRIAL LAW Q. No. 6. Describe different kinds of leave entitled to a worker in the Labour Act, 2006.

[Marks: 20] Q. No. 7. State the provisions of law with regard to health and child protection as enshrined in the Labour Code, 2006.

[Marks: 20] Q. No. 8. (a) Define Trade Union, discuss it objectives. (b) Describe the requisites for registration of a ‘trade union’ of workers. (c) What constitutes ‘unfair labour practices’ by an employer?

[Marks: (6+7+7) = 20] Q. No. 9. State the procedure for ‘settlement of an industrial dispute’.

[Marks: 20] Q. No. 10. Describe any two of the following provisions as laid in the Labour Code, 2006 with regard to – (a) dismiss; (b) discharge; (c) termination; and (d) retrenchment; (e) Labour appellate tribunal.

[Marks: (10+10) = 20]

= THE END =

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CMA APRIL-2010 EXAMINATION

PROFESSIONAL LEVEL-II

SUBJECT: 204. TAXATION.


Q. No. 1. (a) Mr. Kaiser, Managing Director of a multi national company gets the following remuneration,

benefits and allowances during the year ended on 30.06.2009: (i) Salary at the rate of Tk.25,000/- per mensem, (ii) Rent free accommodation (unfurnished), company pays the rent @ Tk.30,000/- per

mensem; (iii) T.A. & D.A. Tk.1,50,000, residence utility bills Tk.75,000, hospital bills Tk.45,000, club

bills Tk.60,000 are all reimbursed by the company; (iv) Performance bonus equivalent to 3 months salary and festival bonus equivalent to 2

months salary are paid; (v) Mr. Kaiser contributes 10% of the basic salary to CPF (recognized) and the company also

contributes the same amount. Compute total income of M. Kaiser from the above information.

(b) What will happen to the above mentioned company if it pays salary to Mr. Kaiser in cash? (c) What types of errors are generally fall within the purview of rectification u/s 173? Who can

claim and what is the time limit for claiming rectification u/s 173?

[Marks: (10+2+3) = 15] Q. No. 2. Write short notes on the following in relation to Income Tax Ordinance, 1984: (a) Tax Audit; (b) Speculative Business; (c) E-Filing; (d) Initial Depreciation; and (e) Rule making power.

[Marks: 5×2=10] Q. No. 3. Differentiate between the following:- (a) Normal assessment and Universal self assessment. (b) Question of law and question of fact. (c) Income year and assessment year. (d) Revisional power of CT and Revisional power of IJCT. (e) T.I.N. and B.I.N.

[Marks: 5×2=10]

Q. No. 4. ABC Co. Ltd. is an exporter of jute products manufactured in its mills. Income under the head was disclosed at Tk.30 million for the assessment year 2009-2010. The DCT at the time of hearing detected the following facts:

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CMA APRIL-2010 EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 204. TAXATION. Q. No. 4. (Contd..)

(i) Salary of repatriate consultant engineer, supervised the installation of the jute mills, Tk.5,40,000 was debited in the profit & loss account.

(ii) Depreciation was claimed at Tk.15,00,000 including depreciation on a leasehold machinery of Tk.12,00,000. Depreciation on it was claimed at Tk.2,40,000. The lease rental for the year was Tk.1,50,000.

(iii) A BMW jeep was purchased at a cost of Tk.55 lacs. Depreciation on it was charged @20% on the cost of the vehicle. The amount of depreciation was not shown in the depreciation stated above.

(iv) A machinery costing Tk.2,00,000 was sold during the year at Tk.3,50,000 which was not reported in the accounts. Depreciation of Tk.7,500 up to the date of sale on 31.12.08 was claimed in the accounts. WDV on the date of sale was Tk.92,500.

(v) Interest on loan was claimed at Tk.45,00,000 on a total loan of Tk.3.5 crores. It is ascertained that an amount of Tk.50,00,000 has been paid as loan to XYZ Ltd. at the time of purchasing a textile mills on 01.01.09 and Tk.30,00,000 has been paid to one of the Directors to purchase a flat for him.

(vi) Sundry creditors were shown at Tk.35,00,000. Out of this an amount of Tk.3,00,000 originated in 2004-05, Tk.3,50,000 in 2005-06, Tk.1,50,000 in 2006-07 and the rest in the current year.

(vii) The company paid advance tax in all Tk.70,50,000. The last assessed income was Tk.25 million.

Compute total income and tax payable by the company. [Marks: 15]

Q. No. 5. Mr. A, Mr. B and Mr. C are three partners of ABC& Associates who share profit and loss in 2:2:1 ratio. The profit and loss account for the year ended on June 30, 2009 is given below :

ABC & Associates Profit and Loss Account

For the year ended on June 30, 2009. Particulars Amount (Tk.) Particulars Amount (Tk.) Rental expenses 25,000Utilities 20,000Commissions 40,000Advertisements 15,000Miscellaneous Expenses 28,000Interest on Capital : A - 7,000 B - 7,000 C - 6,000

20,000Salaries :

A – 24,000 C – 22,000

46,000Net Profit 3,06,000

5,00,000

5,00,000

Gross Profit

5,00,000 Other Information: (i) Rent includes Tk.15,000 paid to Mr. C who partially owns the business premises. (ii) Tk. 12,000 of commission is given to Mr. B for his special assignment. (iii) Miscellaneous expense includes a donation of Tk. 8,000. (iv) Partners have income from different sources as follows:

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CMA APRIL-2010 EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 204. TAXATION. Q. No. 5. (Contd..)

Sources Mr. A(Tk.)

Mr. B (Tk.)

Mr. C(Tk.)

Income from House Property 50,000Income from Interest on Securities 40,000Agricultural Income Income from other sources (Dividend) 28,000

70,000 50,000

60,000 80,000

15,000

Required: (a) Compute the total income of the firm; (b) Compute the amount of tax liability of the firm; (c) Show the distribution of profit to the partners; (d) Compute total income of the partners; (e) Compute the amount of net tax liability of the partners.

[Marks: (5x3) = 15]

Q No. 6. (a) Distinguish between ‘Rebate’ ‘Drawback’ and ‘Refund’ as per VAT Act , 1991. (b) Mention five Points where Input Tax Rebate is not entitled (as per related section of VAT Act,

1991). (c) Assume you are a Manager, VAT affairs, of a Manufacturing Company. Which books of

Accounts you must maintain to comply law? How long will you preserve the books and records?

(d) Define ‘Export’ and ‘Deemed Export’ as per changes made by Finance Act, 2009 for VAT Act, 1991.

(e) Distinguish between Appellate Commissioner of Customs and VAT and Appellate Tribunal of Customs and VAT.

[Marks: (5x4=20)] Q No. 7. (a) XYZ Ltd imports A4 size paper from Singapore. Invoice Value is $3000(C&F), Exchange rate

is 1$=70TK, Customs Duty is 25%, Supplementary Duty is 35%, AIT is 3%, (Consider 1% Handling charge and 1% Insurance fees). Calculate Customs Duty, VAT, Supplementary Duty and Total Tax Liability of XYZ Ltd at the import stage.

(b) What are the salient features of valid gift? Who can make a valid gift? (c) Why is Baggage rule necessary? Mention at least five consumable items which are tax free

under baggage rules at the Airport. [Marks: (3x5) = 15]

= THE END =

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PROFESSIONAL LEVEL-III SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II.


Q. No. 1. (a) Define business combination as per IFRS-3. Discuss its various types. (b) On January 1, 2010, Point Co. Ltd. issued 12,000 shares of its Tk. 10 par value stock to acquire

the net assets of Light Company. Underlying book value and fair value information for balance sheet items of Light Company at the time of acquisition is as follow: Balance Sheet Item Book Value Tk. Fair Value Tk. Cash 60,000 60,000 Accounts Receivable 1,00,000 1,00,000 Inventory (FIFO basis) 60,000 1,15,000 Land 50,000 70,000 Buildings and Equipment 4,00,000 3,50,000 Less: Accumulated Depreciation (1,50,000) - Total Assets 5,20,000 6,95,000 Accounts payable 10,000 10,000 Bonds payable 2,00,000 1,80,000 Common stock (Tk. 5 par value) 1,50,000 Additional paid-in capital 70,000 Retained Earnings 90,000 Total Liabilities and Equities 5,20,000

Light Company’s shares were selling at Tk. 18 and Point’s company’s shares were selling at Tk. 50 just before the merger announcement. Additional cash payments made by Point Co. in completing the acquisition were:

Tk. Finder’s fee paid to Firm that located Light Co. 10,000 Audit fee stock issued by Point Co. 3,000 Stock registration fee for new shares 5,000 Legal fees paid for transfer of assets 9,000 Cost of SEC registration of point shares 1,000

Required: (a) Prepare all Journal Entries in Point Company’s books using Acquisition Method. (b) Present all entries in Light Company’s books for combination and the distribution of stock

received. [Marks: (5+9+6) = 20]

Q. No. 2. (a) Describe in brief IAS-21 guideline in translation to presentation currency. (b) A & Co. Inc. of the U.S.A. purchased 80% of the outstanding stocks of WR & Co., located in

Australia on January 1, 2003. The purchase price in Australian dollar (A$) was A$ 40,000; and A$ 8,000 of the differential was allocated to plant and equipment, which is amortized over a 10 year period. The remainder of the differential was attributable to goodwill. WR & Co.’s trial balance on December 31, 2003 in Australian dollars is as follows:

Debits Credits Cash A$8,820 Accumulated depreciation 12,000Accounts receivable 14,400 Accounts payable 10,760Inventories 17,200 Payable to A & Co. Inc. 2,160

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CMA APRIL-2010 EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II. Q. No. 2(contd.....)

Plant & Equipment 48,000 Interest payable 600Cost of goods sold 66,000 12% Bonds payable 20,000Depreciation expense 4,800 Premium on bonds 1,140Operating expense 26,300 Common stock 18,000Interest expense 1,140 Retained earnings 8,000Dividend declared 1,800 Sales 115,800 A$188,460 A$188,460

The following are the additional information: (i) WR & Co. uses average cost for cost of goods sold. Inventories increased by A$ 4,000 during

the year. Purchases were made uniformly during 2003. The ending inventories were acquired at the average exchange rate for the year.

(ii) Plant and equipment were acquired as follows: January 1, 2001 A$36,000 January 1, 2003 12,000 (iii) Plant and equipment are depreciated using the straight line method, a 10 year life and no

residual value. (iv) The payable to A & Co. Inc., is in Australian dollars. A & Co.’s books show a receivable from

WR & Co. of US$ 1,296. (v) The 10 year bonds were issued on July 1, 2003 for A$ 21,300. The premium is amortized on a

straight-line basis. The interest is paid on April 1 and October 1. (vi) The dividends were declared and paid on April 1. (vii) Exchange rates were as follows:

January, 2001 A$1 = US$ 93 August, 2001 A$1 = US$ 88 January 1, 2003 A$1 = US$ 70 April 1, 2003 A$1 = US$ 67 July 1, 2003 A$1 = US$ 64 December 31, 2003 A$1 = US$ 60 2003 average A$1 = US$ 65

(viii) A & Co. Inc. appointed an appraiser on December 31, 2003 to test the value of goodwill who reported that the goodwill on combination has impaired by 1/10th of its original value.

Required: (i) Prepare a schedule translating the December 31, 2003 trial balance of WR & Co. from

Australian dollars to US dollars. (ii) Prepare a statement of the subsidiary in US dollar taking into consideration amortization

expenses and impairment losses on percents differential over book value (ignore Income Taxes) (iii) Prepare a schedule showing non-controlling interests in subsidiary.

[Marks: (5+15) = 20] Q. No. 3. (a) Distinguished between an up-stream sale of inventory and a down-stream sale. Why it is

important to know whether a sale is up-stream or down-stream? (b) The December 31, 2006 balance sheet for DC & Co. and its 70% owned subsidiary, HC & Co.

contained the following summarized position:

DC & Co. HC & Co.Cash and receivable Tk. 19,600 Tk.8,000Inventories 30,000 20,000Building & Equipment (net) 62,000 56,000Investment in HC & Co. stock 56,000Total assets Tk.167,600 84,000

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CMA APRIL-2010 EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II. Q. No. 3(contd.....)

Accounts payable 14,000 4,000Common stock 40,000 30,000Retained earnings 113,600 50,000Total liabilities & equity Tk.167,600 Tk.84,000

DC & Co. Purchased the shares of HC & Co, at book value on January 1, 2005. On December 31, 2006. DC & Co.’s balance sheet contains inventories items purchased from HC & Co. for Tk.19,000. The item cost of HC & Co. Tk.11,000 to produce. In addition HC & Co.’s inventories contain goods it purchased from DC & Co. for Tk.5,000 that DC & Co. had produced for Tk.3,000. Required: (i) Prepare all eliminating entries needed to complete a consolidated balance sheet work paper as

of December 31, 2006. (ii) Prepare a consolidated balance sheet work paper as of December 31, 2006.

[Marks: (5+5+10) = 20] Q. No. 4. (a) Define Dilutive and Antidilutive securities. How they affect the computation of EPS? (b) At December 31, 2009 the financial statements of Pubali Co. Ltd. included the following:

Net income for 2009 Tk.5,30,000 Common stock, Tk. 10 par: Shares outstanding on 01.01.2009 1,50,000 shares Shares retired for cash on 01.02.2009 24,000 shares Shares sold for cash on 01.09.2009 18,000 shares 2 for 1 stock split on July 23 preferred stock, 10% Tk. 10 par, Cumulative, nonconvertible

Tk. 70,000

Preferred stock, 8%, Tk. 1 par, Cumulative, Convertible into 4,000 shares of common stock

Tk. 1,00,000

Common stock warrants outstanding for 4,000 shares of common stock, the exercise price is Tk. 15. Additional data: The market price of the common stock averaged Tk. 20 during 2009. The convertible preferred stock had been issued at par in 2007. The tax rate for the year was 40%. Required: (i) Basic; and (ii) Diluted earnings per share for the year ended December 31, 2009.

[Marks: (5+6+9) = 20] Q. No. 5. (a) Give four different transactions originating with the branch that affect the reciprocal accounts. (b) The Sunrise Company opened its Riverside Branch on January 1, 2009. The home office will

ship merchandise to the branch at 40% mark-up on cost. Both home office and branch uses perpetual inventory system. The following transactions took place during the year:

(i) The Sunrise Company transferred Tk. 50,000 by cheque to the branch. (ii) The home office shipped merchandise costing Tk. 40,000 to the branch. (iii) The branch received an equipment costing Tk. 42,000, purchased by the home office. The home

office maintains all fixed assets accounts. (iv) The branch purchased additional merchandise costing Tk. 35,000 on account. (v) The branch returned damaged merchandise with a billed price of Tk. 3,500 to the home office. (vi) The branch sold 2/3

rd of the inventory received from home office: In cash Tk. 20,000 On account Tk. 40,000

(vii) Branch collection on credit sales Tk. 40,000

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CMA APRIL-2010 EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II.

Q. No. 5. (contd.....)

(viii) Branch cash expenses for the year are as under:

Advertising Tk. 2,000

Salaries Tk. 5,000

Utilities Tk. 1,000

Maintenance Tk. 500

Miscellaneous Tk. 100

(ix) Depreciation expense for the year recorded by home office on assets used by the branch totaled Tk. 1,500.

(x) Cash remitted to home office Tk. 40,000.

Required:

(i) Record the transactions on the books of both home office and branch in Journal.

(ii) Prepare necessary closing entries on the branch books

(iii) Prepare the adjusting and closing entries on the home office books. [Marks: (2+10+4+4) = 20]

= THE END =

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PROFESSIONAL LEVEL - III SUBJECT: 302. ADVANCED COST ACCOUNTING.


Q.No.1. (a) What is equivalent production? Explain in terms of its effect on computed unit costs. (b) How are equivalent production figures computed when FIFO costing is used? (c) Prime Company manufactures tranquilizers. Production is divided into three processes: Mixing,

Compounding, and Packaging. Average costing is used in the first two departments, and FIFO costing is used in the Packaging Department.

The following data are available for September: Quantity schedule:

Mixing Compounding Packaging Units in process at beginning 4,000 2,000 2,000 Units started in process 60,000 Units received from preceding Department - 50,000 46,000 64,000 52,000 48,000 Units transferred to next dep. 50,000 46,000 Units transferred to finished goods - - 41,600 Units lost during process 2,000 * - 4,000 ** Units Still in process 12,000 6,000 2,400 64,000 52,000 48,000

* Loss are with in normal tolerance limits. ** Loss is assumed to be entirely from units transferred in this period.

Mixing Compounding Packaging Stage of completion of units in Process at the beginning of period:

Materials 1/1 - ½ Labor and factory overhead 5/6 2/3 ½ Stage of completion of units in Process at end of period:

Materials 1/1 - 1/6 Labor and factory overhead ½ 2/3 1/6 Cost data: Work in process- Beginning inventory: Cost form preceding dep. - Tk.2,260 Tk.3,000 Materials Tk.1,960 - Tk.60 Labor Tk.770 Tk.350 Tk.130 Factory overhead Tk.1,060 Tk.200 Tk.100 Cost added during period: Materials Tk.29,040 - Tk.1,230 Labor Tk.10,430 Tk.13,400 Tk.2,870 Factory Overhead Tk.15,740 Tk.8,550 Tk.2,460

Required: (a) Compute the equivalent units of production for each department. (b) Prepare a combined cost of production report for September. (Carry unit cost computations to

five decimal places). [Marks: 4+4+(6+6)= 20]

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL - III SUBJECT: 302. ADVANCED COST ACCOUNTING. Q. No. 2. (a) Why is market value method for joint cost allocation so often used by the industry? (b) Seven brother corporation produces three products Alpha, Beta and Gamma. Alpha and Gamma

are joint products , while Beta is a by product of Alpha. No joint cost is to be allocated to the by product. The production for a given year are as follows: (i) In Department 1, 1,10,000 pounds of material, Rho, are processed at a total cost of Tk.

1,20,000. After processing 60% of the units are transferred to Department 2 and 40% of the units (now Gamma) are transferred to Department 3.

(ii) In Department 2, the material is further processed at a total additional cost of Tk. 38,000. Seventy percent of the units (now Alpha) are transferred to Department 4 and 30% emerge as Beta, the by product , to be sold at Tk. 1.20 per pound . The marketing expense related to Beta is Tk. 8,100.

(iii) In Department 4, Alpha is further processed at a total additional cost of Tk. 23,660. After processing, Alpha is ready for sale at Tk.5 per pound.

(iv) In Department 3, Gamma is processed at a total additional cost of Tk. 1,65,000. In this department, a normal loss of units of Gamma occurs, which equals 10% of the good output of Gamma. The remaining good output is sold for Tk.12 per pound.

Required: (1) Prepare a schedule showing the allocation of the Tk. 1,20,000 join cost between Alpha and

Gamma, using the market value at split of point and treating the net realizable value of Beta as an addition to the sales value of Alpha.

(2) Prepare a statement of gross profit for Alpha, independent of the answer to requirement, assuming that: (a) Tk.1,02,000 of total joint cost was appropriately allocated to Alpha. (b) 48,000 pounds of Alpha and 20,000 pounds of Beta were available for sale. (c) During the year , sales of Alpha were 80% of the pounds available for sale. There was no

beginning inventory. (d) The net realizable value of Beta available for sale is to be deducted from the cost of

producing Alpha. The ending inventory of Alpha is to be based on the net cost of production.

(e) All other cots, sales price, and marketing expenses are those presented in facts of the original problem.

[Marks: 5+8+7 =15] Q. No. 3. (a) What is the classification of cost in transport company? (b) What are the primary goals of JIT philosophy, and how does JIT attempt to achieve these goals? (c) A person owns a bus which runs between Chittagong and Dhaka for 15 days in a month. The

distance from Chittagong and Dhaka is 300 kilometers. The bus completes the trip from Chittagong to Dhaka and back the same day. The bus goes another 10 days in a month towards Cox’s Bazar. The distance from Chittagong to Cox’s Bazar is 150 kilometers. The trip to Cox’s Bazar and back is also completed the same day. Calculate the fare that each passenger should pay if the owner wants to earn a profit of 25% on takings.

The other particulars are given below: Cost of the bus Tk.15,00,000 ; Depreciation 20% per annum ; Interest on capital 10% per annum ; Salary of the driver Tk.3,500 per month ; Salary of the contractor Tk.1,500 per month. Office expenses Tk.3,000 per month ; Salary of the part-time accountant Tk.2,500 per month ; Insurance Tk.16,000 per annum.

Diesel consumption: 8 kilometers per liter costing Tk. 10 per liter. Lubricant : Tk. 70 per 100 kilometers. Taxes and fees : Tk. 6,000 per annum; Repairs and maintenance Tk. 7,500 per month. Registration and road license : Tk. 5,000 per annum. Normal capacity of the bus : 54 persons. The bus is generally occupied 90% of capacity.

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

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL - III SUBJECT: 302. ADVANCED COST ACCOUNTING. Q.No.4. (a) Why are managers often unaware of the magnitude of quality costs? (b) Cost associated with the quality of conformance can be broken down into four broad groups.

What are these four groups and how do they differ? (c) In response to intensive foreign competition, the management of Falcon Incorporation has

attempted over the past year to improve the quality of its product. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Cost relating to quality and quality control over the last two years are given below:

This year (Tk.) Last year (Tk.) Inspection 900,000 750,000 Quality engineering 570,000 420,000 Depreciation of test equipment 240,000 210,000 Rework Labor 1,500,000 1,050,000 Statistical process control 180,000 - Cost of field servicing 900,000 1,200,000 Supplies used in testing 60,000 30,000 System development 750,000 480,000 Warranty repairs 1,050,000 3,600,000 Net cost of scrap 1,125,000 630,000 Producing testing 1,200,000 810,000 Product recalls 750,000 2,100,000 Disposed of defective products 975,000 720,000

Sales have been flat over the past few years, at Tk.75,000,000 per year. A great deal of money has been spent in the effort to upgrade quality, and management is anxious to see whether or not the effort has been effective. Required: (i) Prepare quality cost report that contains data for both this year and last year. Carry percentage

computations to two decimal places. (ii) Prepare a written evaluation to accompany the reports you have been prepared in (i) above. This

evaluation should discuss the distribution of quality costs in the company, changes in the distribution that you see taking place, the reasons for changes in costs in the various categories, and any other information that would be of value to management.

[Marks: 3+3+(6+8)= 20] Q. No. 5. (a) Discuss the meaning of variance control and responsibility by various levels of management. (b) What is target costing? How do target costs enter into the pricing decision? (c) Falcon International Company manufactures Product G, which sells for Tk.25 per unit. Material

M is added before processing starts, and labor and overhead are added evenly during the manufacturing process. Production capacity is budgeted at 110000 units of G annually. The standard costs per unit of G are:

Direct materials: M : 2 pounds @ Tk.1.50 per hour Tk.3.00 Direct labor: 1.5 hours at Tk.8 per hour Tk.12.00 Factory overhead:

Variable Tk.1.50 Fixed Tk.1.10

Tk.2.60 Total standard cost per unit Tk.17.60

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL - III SUBJECT: 302. ADVANCED COST ACCOUNTING. Q.No.5. (contd……) A process cost system is used. Inventories are valued at standard cost. All variances form standard costs are charged or credited to Cost of Goods Sold in the year incurred. Inventory data for the year 2009:

January 1 December31 Material M 50000 pounds 60000 pounds Work in process: All materials, 2/5 processed 10000 units - All materials, 1/3 processed - 15000 units Inventory, finished goods 20000 units 12000 units

During 2009, 250000 pounds of M were purchased at an average cost of Tk.1.485 per pound; and 240000 pounds were transferred to work in process inventory. Direct labor costs amounted to Tk.13,13,760 at an average hourly labor rate of Tk.8.16 Actual factory overhead for the year 2009:

Variable Tk.181,500 Fixed Tk.114,000

A total of 110000 units of G were completed and transferred to finished goods inventory. Marketing and administrative expenses were Tk.681,000. Required: Prepare an income statement for the year 2009, including all manufacturing cost variances and using the two-variance method for factory overhead. [Marks: 4+4+12 = 20]

= THE END =

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

Time : Three hours Full Marks: 100 Answer FIVE questions taking any THREE from Part-A and TWO from Part-B including

question No. 5 which is compulsory. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

PART – A : CORPORATE LAWS Q. No. 1. a) Differentiate between a private limited company, public limited company and a company by

guarantee. (b) What are the formalities to be observed in transforming a public limited company from a private

limited company? (c) Define subsidiary company.

[Marks: 5+10+5) = 20] Q. No. 2. a) State the provisions of the Companies Act, 1994 as to appointment of Managing Director. b) Discuss the qualifications of a director of a company. c) Directors are trustees as well as agents of the company – Discuss. [Marks: 5+5+10=20] Q. No. 3. a) What are the pre-requisites of a valid meeting? b) Outline the rules governing the issue of notice for a company’s General Meeting. c) When and how is special resolution passed by a company?

[Marks: 7+6+7=20] Q. No. 4. a) What are the powers of the Registrar of Joint Stock Companies and Firms with respect to

inspection of Books of Account? b) What are the duties of the Directors in relation to inspection of Books of Account? c) What are the penalties for failure of the Directors in relation to inspection of Books of Account?

[Marks: (8+8+4) = 20] Q. No. 5. Write short notes on any 4 (four) of the following: (i) Corporate Governance; (ii) Statement in lieu of Prospectus; (iii) Director’s Report; (iv) Divisible Profit; (v) Appointment of Auditor; (vi) Extra Ordinary General Meeting.

[Marks: (4 x 5) = 20]

PART – B : CORPORATE GOVERNANCE AND SECRETARIAL PRACTICES. Q. No. 6. A foreign company is contemplating to start its business in Bangladesh and seeks your opinion over the legal position of opening its business in the form of a subsidiary. Advise the legal steps covering taxation, remittance and employment.

[Marks : 20] Q. No. 7. A listed company in its Board meeting for approval of accounts took the following decisions: i) Interim Dividend 20% already paid, proposed final dividend 20% in addition to interim; ii) Auditors – existing auditors have consented to their re-appointment; iii) Acquiring 40% stock in an existing company; iv) Appointment and remuneration of Chief Financial Officer approved; v) Bonus issues utilizing all available reserves; and vi) Increase in paid up capital through issue of shares to existing shareholders.

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CMA APRIL-2010 EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 303.CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES. Q. No. 7. (contd....) Draft a notice for the forthcoming Annual General Meeting of the company and agenda containing items that are normally included in an Annual General Meeting for members’ approval. Point out which of the above items would be included in the Directors’ Report.

[Marks: 20] Q. No. 8 a) Discuss the role of a company secretary in a public listed company? (b) State the provisions that have to be complied with regard to carrying out Cost Audit and

penalties applicable for not carrying out Cost Audit by a large textile industry.

[Marks: (10+10) = 20]

= THE END =

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PROFESSIONAL LEVEL-III SUBJECT: 304. AUDITING.

Time: Three hours Full Marks: 100 All questions are to be attempted. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

Q. No. 1.

(a) What do you know about limitation of scope of audit and as an Auditor what will be your responsibilities in this regard?

(b) What is meant by the concept of Audit Methodology and Audit Administration?

(c) Define related party transaction. How can you verify the related party transactions at the time of audit?

[Marks: (5x3) = 15]

Q. No. 2.

(a) Explain the meaning and significance of the harmonization of financial reporting and audit practice in the context of corporate development of Bangladesh.

(b) X Ltd., a newly established company has invited your firm as the first Auditor of the Company. Keeping in mind ISA-210 “Terms of Audit Engagements”, you are required to write a formal letter to the directors setting out the responsibilities for the company’s financial statements for directors as well as your firm as auditors’.

[Marks: (10+5) = 15]

Q. No. 3.

Under the code of Ethics for professional Accountants, issued by IFAC, a Professional Accountant in public practice is required to comply with some fundamental principles. In the light of the IFAC code, you are required to:

(i) State and discuss FIVE fundamental principles;

(ii) State FIVE broad categories of threats encountered by the professionals.

(iii) State FIVE safeguards that may be created by the profession, legislation or regulation to eliminate or reduce the threats.

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

Q. No. 4.

(a) Do you think that introduction of Cost Audit would be beneficial for the economy of Bangladesh?

(b) Write down the provision of Cost Audit in the Companies Act, 1994.

[Marks: (5+5) = 10]

Q. No. 5.

(a) What do you understand by the term “Computer Assisted Audit Techniques’? What are common types of CAATs applicable in EDP environment?

(b) Discuss the design and control procedures which the auditor should adopt in applying CAAT in an audit under EDP environment.

(c) To what extent can the external auditor of a company rely upon the efficacy of an internal control system to reduce the extent of his checking the transactions?

[Marks: (5+4+6) = 15]

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 304. AUDITING.

Q. No. 6.

Discuss the following with reference to the International Standard on Auditing:

(a) ISA 200

(i) Audit Risk and Materiality, (ii) Reasonable Assurance

(b) ISA 240

(i) Internal limitation of an Audit, (ii) Professional Skepticism

(c) ISA 300

(i) The overall Audit plan, (ii) The Audit program.

[Marks: (6x2.5) = 15]

Q. No. 7.

Management representation are an important source of audit evidence. These representations may be oral or written and may be obtained either on an informal or formal basis. Auditors will include information obtained in this manner in their audit working papers where it forms part of their total audit evidence.

Required:

(a) Explain the nature and role of the letter of representation.

(b) Explain why it is important for the auditor to discuss the contents of the letter of representation at an early stage of the audit.

(c) Discuss the implications for the auditor of a small company; if the directors refuse to sign the letter of representation.

[Marks: (7+4+4) = 15]

= THE END =

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PROFESSIONAL LEVEL-IV SUBJECT: 401. FINANCIAL MANAGEMENT.


Q. No. 1. (a) “Working capital management deals with decisions regarding the appropriate mix and level of

current assets and current liabilities” Elucidate the statement: (b) A proforma cost sheet of a company provides the following particulars:

Unit cost (Tk.) Element of cost: Raw materials 80 Direct labor 30 Overhead 60 Total cost 170 Profit 30 Selling price 200

The following further particulars are available: Raw materials in stock, on average one month; Materials are in process, on average half a month; Finished goods in stock, on average one month. Credit allowed by suppliers is one month; Credit allowed to debtors is two months; Average time lag in payment of wages is 11/2 weeks and one month in overhead expenses. One-forth of the output is sold against cash; Cash in hand and at bank is expected to be Tk. 365,000. Required: Prepare a statement showing the working capital needed to finance a level of activity of 104,000 units of production. You may assume that production is carried on evenly throughout the year, and wages and overheads accrue similarly.

[Marks: (5+15) = 20] Q. No. 2. (a) Describe briefly the major types of financial management decisions that business firms make. (b) Describe briefly the ingredients and objectives of portfolio management. (c) Calculate operating and Financial Leverage under situation A, B and C and Financial plans 1, 2

and 3 respectively from the following information relation to the operation and capital structure of XYZ Co. Also find out the combinations of operating and financial leverage which give the highest value and the least value. How are these calculations useful to the financial manger of a company? Installed capacity 1200 units Actual production and sales 800 units Selling price per unit Tk. 15 Variable cost per unit Tk. 10 Fixed cost: Situation A 1,000 Situation B 2,000 Situation C 3,000

Capital structure Financial plan 1 2 3 Equity 5,000 7,500 2,500 Debt 5,000 2,500 7,500 Cost of debt 12%

[Marks: (3+2+20) = 25]

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CMA APRIL-2010 EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 401. FINANCIAL MANAGEMENT.

Q. No. 3.

The balance sheet of Smart Ltd. As on March’31, current year is as follows (Figures in lakhs Tk.) Liability Amount Assets Amount

200 140 360 200 120

80

500 300 240

60

Share capital Reserves Long-term loans Short-term loans Payables Provisions

1,100

Fixed assets Inventories Receivables Cash and Bank

1,100Sales for the current year were Tk.600 lakh. For the next year ending on March 31, they are expected to increase by 20 per cent. The net profit margin after taxes and dividend payout are expected to be 4 and 50 per cent respectively. You are required to: (a) Quantify the amount of external funds required. (b) Determine the mode of raising the funds given the following parameters.

(i) Current ratio should be 1.33. (ii) Ratio of fixed assets to long-term loans should be 1.5. (iii) Long-term debt to equity ratio should not exceed 1.06.

[Marks : (5+15) = 20]

Q. No. 4. (a) How would you analyze the financial position of a company from the point of view of (i)

Investor (ii) a creditor (iii) a financial executive of a Company. (b) The capital of ‘E’ Co. Ltd. is as follows:

9% preference shares Tk. 10 each Tk. 300,000Equity shares of Tk. 10 each Tk. 800,000 Tk. 11,00,000

The accountant has ascertained the following information: Profit (after tax 60%) Tk. 270,000; Depreciation Tk. 60,000; Equity dividend paid 20%; market price of equity shares Tk. 40. You are required to state the following: (i) Dividend yield on the equity shares. (ii) Covers for the preference and equity dividends. (iii) Earnings for the equity shares. (iv) Price earning ratio.

[Marks: (4+16) = 20] Q. No. 5. (a) Differentiate between cost centre, profit centre and investment centres. Explain how

performance is measured in each? (b) An Engineering Company has a cost of equity capital of 15%. The current market value of the

firm is Tk. 30,00,000 @ Tk. 30 per share. Assume values for I (new Investment) Tk. 900,000, E (Earnings) Tk. 500,000, and total dividends (D) Tk. 300,000, show that under the MM assumptions the payment of dividend does not affect the value of the firm.

[Marks: (5+10) = 15]

= THE END =

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PROFESSIONAL LEVEL-IV SUBJECT: 402. STRATEGIC MANAGEMENT ACCOUNTING.


Q. No. 1.

(a) Discuss in brief the theory of Total Quality Management (TQM).

(b) Differentiate between the production view of quality and customer view of quality.

(c) What are the technicians and tools used for analytical problem solving in production quality areas?

(d) How is risk defined in capital budgeting analysis? List several aspects of a project in which risk is involved; and how can risk affect the net present value of a project?

Marks: (4 5) = 20 Q. No. 2.

Siraj wholesaling is considering the purchase of a computerized system to track its delivery trucks and vans. The new system would lower operating costs by coordinating delivery vehicles and drivers to reduce total miles traveled per taka of revenue. The technology would cost Tk.6,00,000 and have an expected life of 6 years with an expected salvage value of Tk.50,000 at the end of its life. Near the end of the fourth year, it is anticipated that the communication equipment in the new system would require maintenance by the manufacturer costing Tk.75,000. This amount is fully deductive for tax purpose in the year incurred. Management requires that investments of this type be paid back in 5 years or less. Cost savings are anticipated to be Tk.1,45,000 in each of the first four years and Tk.1,00,000 in each of the last two years. The company’s discount rate is 10 percent; its tax rate is 35 percent and the equipment would be depreciated for tax purposes using the straight line method with no consideration of salvage value over a period of 5 years.

Required:

(a) Prepare a timeline for displaying cash flows. Be certained to consider the effects of taxes;

(b) Calculate the after tax pay back period;

(c) Calculate the after tax net present value on the project; and

(d) Discuss the appropriateness of making such an investment. Marks: (4 5) = 20

Q. No. 3. SAF Industries is one of the larger units of Akij Group. SAF produces numerous products used in leather goods. For 2007 Akij group and SAF executive negotiated performance targets for SAF as follows:

Performance measure Target level Profit margin 7% Asset turnover 2 times Return on investment 14% Residual Income (target return rate is 10%) Tk.5,20,000 Actual results and other data for 2007 are summarized below: Total assets at the beginning of the year Tk.1,22,00,000 Total assets at the end of the year 1,46,00,000 Sales ………………………………………………………… 2,45,60,000 Operating expenses …………………………………………. 2,27,20,000

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 402-STRATEGIC MANAGEMENT ACCOUNTING. Q. No. 3. (Contd..) Required: (a) Calculate the profit margin of SAF. (b) Determine the asset turnover of SAF. (c) Compute the return on investment for SAF. (d) Prove your answer to part (c) using ratios computed in part (a) and (b). (e) Calculate residual income. (f) Evaluate SAF’s performance for 2007.

Marks: (4+4+3+3+3+3) = 20

Q. No. 4. The Mature Products Company is contemplating on the replacement of one of its present machines with a new machine. The present machine is nearing at the end of its economic life, but its life can be extended by a major overhaul. The available information is shown below:

MATURE PRODUCTS COMPANY Machine Replacement data

Original cost of the present machine Tk.40,000 Less accumulated depreciation of the machine 30,000 Book value of the machine Tk.10,000 Purchase price of new machine Tk.1,00,000 Useful life of the new machine 5 years Remaining life of the present machine 2 years Overhaul cost of the present machine extending useful life to a total of 5 years Tk.10,000 Salvage value of new machine 0 Market value of present machine, if sold Tk.4,000 Annual operating information: Present machine New machine Sales of products Tk.4,00,000 Tk.4,00,000 Direct material costs 90,000 90,000 Direct labour costs 80,000 60,000 Variable overhead 48,000 36,000 Fixed overhead exclusive depreciation 1,00,000 1,00,000 Depreciation 10,000 1,00,000

Required:

(a) Identify the relevant items and irrelevant items;

(b) Prepare a comparative income statement for both the machines; and

(c) Using only relevant costs, analyze whether it is desirable to purchase the new machine? Marks: (6+8+6) = 20

Q. No. 5. Qusem industries are a decentralized organization with six divisions. The company’s electrical Division produces a variety of electrical items, including an X52 electrical fitting. The Electrical Division (which is operating at capacity) sells this fitting to its regular customers for Tk7.50 each; the fitting has a variable manufacturing cost of Tk 4.25.

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CMA APRIL, 2010 EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 402-STRATEGIC MANAGEMENT ACCOUNTING. Q. No. 5. (Contd..)

The company’s Brake Division has asked the Electrical Division to supply it with a large quantity of X52 fitting for only Tk 5 each. The Brake Division, which is operating at 50% of capacity, will put the fitting into a brake unit that it will produce and sell to a large commercial airline manufacturer. The cost of the Brake unit being built by the brake Division follows:

Purchased parts (from outside vendors) Tk. 22.50 Electrical fitting X52 5.00 Other variable costs 14.00 Fixed overhead and administration 8.00 Total cost per brake unit Tk. 49.50

Although Tk. 5 price for the X52 fitting represents a substantial discount from the regular Tk. 7.50 price , the manager of the Brake Division believes that the price concession is necessary if his division is to get the contract for the airplane brake units. He has heard “through the grapevines” that the airplane manufacturer plans to reject his bid if it is more than Tk. 50 per brake unit. Thus if the Brake Division is forced to pay the regular Tk. 7.50 price for the X52 fitting , it will either not get the contract or it will suffer a substantial loss at a time when it is already operating at only 50% of capacity. The manager of the Brake Division argues that the price concession is imperative to the well-being of both his division and the company as a whole. Qusem Industries use return on investment (ROI) and Taka profit in measuring divisional performance.

Required

(a) Assume that you are the manager of the Electrical Division. Would you recommend that your division supply the X52 fitting to the Brake Division for Tk. 5 each as requested? Why or why not? Show all computations.

(b) Would it be to the economic advantage of the company as a whole for the Electrical Division to supply the fittings to the Brake division if the airplane brakes can be sold for Tk 50? Show all computations, and explain your answer.

(c) In principle, should it be possible for the two managers to agree to a transfer price in this particular situation? If so, within what range would that transfer price lie?

(d) Discuss the organizational and managerial behavior problems if any, inherent in this situation. What would you advise the company's President to do in the situation?

Marks: (4 x 5) = 20

= THE END =

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PROFESSIONAL LEVEL-IV SUBJECT: 403. STRATEGIC MANAGEMENT AND ORGANIZATIONAL BEHAVIOR.

Time : Three hours Full Marks: 100 Answer any THREE questions from Group-“A” and TWO questions from Group-“B”. All questions carry equal marks. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

PART – A: STRATEGIC MANAGEMENT Q. No. 1. (a) ICMAB is planning a strategy development drive. As part of this process they have asked you

to conduct an analysis of the external environment for them. Use the Porter’s Five Forces framework and do an analysis of the external environment of ICMAB.

(b) What are the major drivers of strategy? Explain the key drivers of Strategy in Banking Sector of Bangladesh. [Marks: (10+10) = 20]

Q. No. 2. (a) What is corporate strategy? How do you think the strategy-making pyramid will differ for a

diversified company and for a single-business company? (b) How can a manager judge which strategic option is best for the company?

[Marks: (14+6) = 20] Q. No. 3. (a) “Strategic management is an ongoing process, not a start – stop even.” – explain. (b) Your client is a large owner and operator of hotels and vacation resorts. It also runs a highly

successful customer rewards program that gives guests the opportunity to earn points for each stay. The company is considering partnering with some small budget hotels and offering guests the opportunity to earn points for stays at participating budget hotels as well. Should it go ahead with this partnership? What should it think about in order to make this decision?

[Marks: (10+10) = 20] Q. No. 4. (a) Describe the features of a successful entrepreneur. (b) Distinguish between entrepreneurial start up and growth strategies. (c) Discuss the entrepreneurial support services. [Marks: (6+8+6) = 20] Q. No. 5. (a) How does multi-country strategy differ from global strategy? Give examples. (b) Distinguish between licensing and franchising. When will you use these types of strategies? (c) How does forward integration differ from backward integration? When will you suggest firms

to go for backward integration? Give examples of some companies that follow backward integration in Bangladesh. [Marks: (6+6+8) = 20]

PART – B: ORGANIZATIONAL BEHAVIOR Q. No. 6. (a) Distinguish between individual behavior and organizational behavior. (b) State the significance of O.B. in managing an organization. (c) Sketch and explain a standard O.B. model. [Marks: (5+5+10) = 20] Q. No. 7. (a) Briefly describe the stages of socialization process with examples. (b) What is MBO? Explain the key elements of MBO with examples. (c) Explain the situational leadership theory with examples. [Marks: (6+8+6) = 20] Q. No. 8. (a) What is Equity theory of Motivation? Describe any situation in real life which can explain the

Equity theory. (b) Do you think deviant workplace behavior is good for an organization? Give your reasons.

Suggest some ways to tackle it. (c) Discuss the five value dimensions of national culture described by Hofstede. Explain where

Bangladesh ranks on each of the five dimensions. [Marks: (6+6+8) = 20] = THE END =

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PROFESSIONAL LEVEL-IV SUBJECT: 404-COST AND MANAGEMENT AUDITING.

Time: Three hours Full Marks: 100 All questions are to be attempted. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet.

PART – A: COST AUDITING (MARKS: 50) Q. No. 1. (a) “Not only the Manufacturing Company but all cost centers require Cost Audit” – Discuss. (b) State the various steps and procedures in appointment of a cost auditor.

[Marks: (4+4) = 8] Q. No. 2. (a) Discuss the provisions of professional misconduct in relation to Cost and Management

Accountants in practices. (b) Cost audit is important for evaluating the appropriate product cost and price. As a Cost auditor

prepare an audit plan and program for the product costing and pricing of consumer and industrial products.

[Marks: (7+8) = 15] Q. No. 3. (a) Why Cost Accounting Record Rules of one industry vary from the other? (b) Briefly discuss the salient provisions of Cost Accounting Record Rules of any one of the

following industry: (i) Jute (ii) Sugar.

[Marks: (7+8) = 15] Q. No. 4. As a Cost Auditor of a Textile Mill, prepare a draft Cost Audit Report for the management of the company on your findings of the following irregularities during the course of your audit: (i) Variation in inventory valuation; (ii) Under absorption of overhead; (iii) Shortage of spares during physical verification; and (iv) Under utilization of plant capacity.

[Marks: (3 x 4) = 12] PART – B: MANAGEMENT AUDITING (MARKS: 50)

Q. No. 5. “Management Audit also includes Audit of Management Information Systems, Decisions Support System, Enterprise Risk Management for control purposes to achieve the objectives” – Discuss.

[Marks: 15] Q. No. 6. (a) Corporate Governance deals with two broad functions of an organization:

(i) Performance and (ii) Conformance issues. Please describe what do you understand by them. (b) How the Management Audit helps establishing good corporate governance in an Organization?

[Marks: (8+7) = 15] Q. No. 7. (a) Describe role of the following in establishing good corporate governance in an organization:

(i) Company Secretary (ii) Head of Audit Committee (iii) Chief Finance Officer/Head of Finance (iv) Management Auditor

(b) What are the common problems that the management face while establishing corporate governance in Bangladesh?

[Marks: (12+8) = 20]

= THE END =

Question April-2010

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Transcript of Question April-2010