Question Nos. 1 and 6 are compulsory and answer any two from the remaining fromeach section.
Figures to the right indicate full marks.
Working should be part of answer.
Answer both the sections in the same answer-book.
Section I-(Auditing)
Q.1(a)Explain Basic Principles of Auditing.10
(b)How would you vouch the followings ?8
(i)Interest Received on Investments.
(ii)Cash Purchases of Stationery.
Q.2(a)What are the various techniques of Auditing ? 8
(b)) Explain in detail the provisions of the Companies Act, 1956, regarding appointment of an Auditor.8
Q.3(a)Discuss the disclosure requirements of "SHARE CAPITAL" as per schedule VI of the Companies Act, 1956. 8
(b)What are the contents of Good Audit Report ?8
Q.4(a)Define and explain the term "Auditing".8
(b)Scrutinise and give your comments as an Auditor on the following Ledger Account. In the Books of M/s. GEC International.8
CEG International Account.
Date
Particulars
Amount Rs.
Date
Particulars
Amount Rs.
1-7-2004
To Balance b/fd.
10,000
31-7-2004
By Bank
10,000
1-8-2004
To Sales
10,000
1-8-2004
By Bills Receivables
11,000
1-8-2004
To Debit Note
2,000
1-8-2004
By Credit Note
1,000
(Rate Difference)
(Spoiled Goods)
2-9-2004
To Sales
15,000
4-9-2004
To Bills Receivables
11,000
4-9-2004
By Bills Receivables
11,250
4-9-2004
To Interest
220
20-9-2004
By Bank
14,250
4-9-2004
To Noting Charges
30
20-9-2004
By Discount
750
15-09-2004
To Sales
20,000
30-9-2004
By Bank
17,500
30-9-2004
By Bed debts
2,500
Total
68,250
Total
68,250
Q.5Write short notes on any four of the followings:-16
(a)Internal check.
(b)Secret Reserves
(c)Contingent Liability
(d)Audit in Computer Environment
(e)Valuation of Closing Stock.
(f)Importance of Internal Audit.
Section II — (Costing).
Q.6 M/s AB & Associates, a partnership firm comprosing of partners A and B, undertook a contract to build a Bridge for Rs. 20,00,000 and commenced the work on 1-10-2003.20
The following is the Trial Balance of firm as on 30-9-2004 :–
Particulars
Debit (Rs.)
Particulars
Credit (Rs.)
Plant & Machinery
2,50,000
Capitals : A
1,20,000
Office Buildings
3,00,000
B
80,000
Materials Purchased
4,20,000
Advanced From Contractee
6,00,000
Wages
1,40,000
Bank Overdraft
1,40,000
Sub-contracting Charges
80,000
Outstanding Wages
10,000
Interest
10,000
Creditors
1,50,000
Office Overheads
50,000
Loans
1,50,000
Total
12,50,000
Total
12,50,000
Additional Information :
Materials worth Rs. 4,00,000 were sent to site.
Out standing sub-contracting charges Rs. 20,000 at the year end.
Allocate 50% of Office overheads and 100% wages to contract.
Plant and Machinery were used for the whole year on contract and provide depreciation @ 10%. p.a.
Partner A was entitled to salary of Rs. 20,000 for site supervision for the year. Provide the same in Account
Contractee pays 75% of the work certified.
Partner A & B share profit and Losses in the ratio of 6 : 4 respectively.
At the end of the year, work uncertified valued at Rs. 10,000 and materials at site Rs. 20,000. Prepare Contract Account.
Profit and Loss Account for the year ended 30-09-2004 and Balance sheet as on that date.
Q.7 Tea Estate Ltd. manufactures flavored Tea which passes through three processes. The following particular are available for the year ended 30-06-2003:-15
Particulars
Process I
Process II
Process III
Raw Material (kg)
10000
4600
1500
Cost of Raw Materials Per kg (Rs.)
5
6
8
Direct Wages (Rs.)
24,000
18,000
12,250
Direct Expenses (Rs.)
15,200
10,736
8,590
Factory Expenses (Rs.)
20,960
6,000
4,255
Normal Loss (%)
4%
8%
5%
Weight Loss (%)
6%
2%
NIL
Scrap Value Per kg (Rs.)
1.80
2.50
4
Output Transferred
to next Process
60%
50%
NIL
Output Sold
40%
50%
80%
Selling Price of Output Per kg
14
16
17
Transferred to Finished Stock
NIL
NIL
20%
% of normal Loss and % of weight loss are based on total input in the process.
Prepare Process Account and Profit and Loss Account.
Q.8(a)The XL Ltd. furnish the following information :10
Ist Period
IInd Period
Sales
2000000
3000000
Profit
200000
400000
From the above, calculate the followings:
P/V Ratio
Fixed Expenses.
BEP
Sales to Earn Profit Rs. 5,00,000
Profit when sales are Rs. 15,00,000
(b)From the following information, calculate labour variances:-5
Standard for 100 units
500 Labour Hours
Rate Rs. 24/- Per Hour
Actual production
1000 units were produced.
Total wages paid Rs. 1, 30,000 for 5200 Hours.
Rate Rs. 24/- Per Hour
Q.9(a)From the following particulars prepare cost sheet showing various elements of cost:-:10
Opening Stock of Raw Materials
Rs. 1, 10,000
Purchases of Raw Material
Rs. 8, 25,000
Carriage Outwards
Rs.28,500
Direct Wages
Rs.4, 21,400
Direct Power
Rs.25,840
Technical Directors Salary
Rs.40,590
Factory Rent, Rates & Insurance
Rs.10,140
Sale of Factory Scraps
Rs.1,460
Depreciation on Factory Buildings
Rs.75,200
Closing Work in Progress
Rs. 1, 20,260
Factory Stationary
Rs.12,340
Opening Stock of Finished Goods
Rs.45,280
Opening Stock of Raw Materials
Rs.36,920
Fees to Brand Ambassador
Rs. 2, 00,000
Stationery and Printing
Rs.12,200
Staff Salaries
Rs. 6, 30,000
Trade Discount
Rs. 1, 20,000
Office Rent
Rs.60,000
Free Sample Expenses
Rs.20,320
Closing Stock of Finished Goods
Rs.50,240
Sales are made to earn profit @ 10% on Cost Price
(b)From the following, prepare Reconciliation Statement of M/S XYZ and Company as on 30-6-2004:5
Net profit as per Financial Accounts Rs. 40,340.
Income Tax Provision made Rs. 30,000.
Material Purchases of 5,000 units were recorded in cost at standard cost Rs. 24/- per unit whereas
in Finance it was recorded at actual cost Rs. 22/- per unit.
