Auditing and Cost Accounting |
| Time: 3
Hours |
October – 2005 |
Marks: 100 |
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| N.B. : |
(1) |
Question NO.1 and 6 are compulsory and
answer any two questions each from the rest from each section. |
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(2) |
Figures to the right indicate full marks. |
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(3) |
Working notes should form
part of your answer. |
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(4) |
Answers of both the sections should be written
in the same answer book. |
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Section
I --- (Auditing) |
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| Q. 1. |
a) |
Explain Primary and Secondary Objects of Auditing. |
10 |
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b) |
What is continuous Audit ? What are its disadvantages ? |
8 |
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| Q. 2. |
a) |
What steps an Auditor should take prior to Commencement of a Statutory Audit under the Companies Act 1956 ? |
8 |
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b) |
What are the dutiies of an Auditor of Company ? |
8 |
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| Q. 3. |
a) |
Explain the term "Capital Expenditure". What are the duties of an Auditor as regards capital expenditure |
8 |
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b) |
Distinguish between Statutory Audit and Internal Audit. |
8 |
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| Q. 4. |
a) |
What are the qualifications and disqualifications of a Company Auditor ? |
8 |
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b) |
Scrutinize & give your comments as an Auditor
on the following Ledger Account.
In the ledger of Spectrum Ltd.
Bills Receivable Account |
| Dr.
Cr. |
| Date 2004 |
Particulars |
Rs. |
Date 2004 |
Particulars |
Rs. |
| 1 oct |
to Bal. B/fd |
59,000 |
4 Oct. |
By Bank |
21,000 |
| 10 Oct. |
to Kedar |
17,500 |
27 0ct. |
By Bank |
19,800 |
| 16 Oct. |
to Ranjit |
68,000 |
27 Oct. |
By Discount |
200 |
| 30 Nov. |
to Pandey |
41,200 |
12 Nov. |
By Mohan |
18,000 |
| 15 Dec |
to Kerkar |
20,500 |
13 Dec. |
By Bank |
17,500 |
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16 Dec. |
By Nitin |
68,000 |
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31 Dec |
By Bal.C/fd |
61,700 |
| Total |
2,06,200 |
Total |
2,06,200 |
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8 |
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Compostion of Opening Balance
| Due From |
Due Date |
Rs. |
| Gopal |
4/10/04 |
21,000 |
| Narayan |
27/10/04 |
20,000 |
| Mohan |
12/10/04 |
18,000 |
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59000 |
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| Q. 5. |
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Write short notes on any four : |
16 |
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(a) Objectives of verification of Assets/Liabilities.
(b) Audit Notebook.
(c) Secret Reserves.
(d) Importance of Internal Control.
(e) Appointment of a Company Auditor by Special Resolution.
(f) Test check. |
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Section
II --- (Costing) |
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| Q. 6. |
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Following information is available from cost records for the year ended 31st December, 2004.
| Direct Material |
Rs. 36 Per Unit |
| Direct Labour |
Rs. 28 Per.Unit. |
| Chargeable Expenses |
Rs. 11 Per Unit |
| Factory Overheads |
Fixed Rs. 16,00,000
Variable Rs.10 Per Unit |
| Office Overheads |
Fixed Rs. 12,50,000 |
| Selling Overheads |
Fixed Rs. 5,00,000 |
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Variable Rs. 25 Per Unit |
| Units Produced & sold 50,000 |
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| Selling price.Per Unit Rs. 210 |
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Following changes are anticipated during the year ended 31st December, 2005.
(1) Production and sales will increase by 60%.
(2) Direct material cost per unit will increase by 12.5%
(3) Direct labour per unit will decrease by 5%
(4) Chargeable expenses per unit will decrease by 10%
(5) Variable factory overheads per utvit will increase by 25%
(6) Variable selling overheads will decrease by 25%
(7) All fixed overheads will increase by 20%
(8) 75% of the output will sold in Domestic Market at a profit of 20% on sales.
(9) Balance 25% output will be sold in Export Market at a profit of 50 % on sales. |
20 |
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You are required to :
(1) Prepare cost sheet for the year ended 31st Derember 2004 and estimated cost sheet for the year ended 31st December 2005., Showing total and per unit cost.
(2) Calculate total and per unit profit for the year ended 31st December 2004.
(3) Calculate total sales and profit for Domestic Market and Export Market. |
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| Q. 7. |
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Y Ltd. manufactures a chemical product which passes through three processes. The cost records 15 shows the following particulars for the year ended 30th" June 2004. Input to I process 20,000 units @ Rs. 28 per unit.
| Particulars |
Process I |
Process II |
Process III |
| Materials |
48,620 |
1,08,259 |
1,03,345 |
| Labour |
32,865 |
84,553 |
77,180 |
| Expenses |
2,515 |
10,588 |
16.275 |
| Normal Loss |
20% |
15% |
10% |
| scrap value epr unit Rs. |
1 |
2 |
2 |
| Actual Output (Units) |
18,000 |
16,000 |
15,000 |
Prepare Process Accounts, Abnormal Gain /Loss Account. Also show process cost per unit for each process. |
15 |
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| Q. 8. |
a) |
The following is the cost structure of a product. Selling price Rs. 100 per unit.
Variable cost per unit
Material Rs. 38
Laoour Rs. 14
Direct Expenses Rs. 8.
Fixed Overheads for the year
Factory overheads Rs. 2,80,000
Office overheads Rs. 2,20,000
Nol of units produced & sold 40,000.
Calculate -.
P/V Ratio.
Break Even Points in Units.
Margin of Safety Amount.
Break Even Point if fixed overheads increased by 20%.
Revised P/V ratio when selling price increased by 20%. |
9 |
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b) |
The standard material cost for 200 units of output is :
| Material |
kg |
Rate Per kg |
| A |
50 |
12 |
| B |
100 |
9 |
| C |
100 |
10 |
The Actual cost for 8000 unit is as follows : '
| Material |
kg |
Total Cost |
| A |
2100 |
28,350 |
| B |
3750 |
30,750 |
| C |
4150 |
46,480 |
Calculate material cost variance, material price variance and material usage variance. |
6 |
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| Q. 9. |
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Siddesh Construction company has undertaken three contracts during'the year and the following particulars are available as on 31-12-2004.
| Particulars |
Contract A |
Contract B |
Contract C |
| Contract Price |
10,00,000 |
25,00,000 |
7,50,000 |
| Material Issued to Contract |
1,65,200 |
2,24,500 |
1,89,600 |
| Labour |
1,02,800 |
1,26,500 |
1,75,500 |
| Sub-Contract Charges |
72,800
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65,900
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28,500 |
| Supervision Charges |
12,000
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18000
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15,000 |
| Architect fees |
10,000
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15,000
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28,000 |
| Insurance Charges |
3,000
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6,100
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7,400 |
| Work Certified |
4,00,000 |
5,00,000 |
5,00,000 |
| Work Uncertified |
35,000
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40,000
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25,000 |
| Amount received from contractee |
3,20,000 |
4,50,000 |
3,75,000 |
| Closing stock of Material |
9,000 |
10,000 |
20,000 |
All contracts were commenced during the current year. Total Depreciation on plants amounted to Rs. 11,200 and allocate the same to all contracts in the ratio of work.certified.
Prepare Contract Accounts. Show the calculation of profit transferred!to Profit and Loss Account. |
15 |
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| Q.10. |
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Write short notes on any three :- |
15 |
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Flexible Budget.
Reasons for differences between Financial profit and Cost profit.
Different Basis of Allocation of overheads.
Batch costing. |
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