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KHYBER-PAKHTUNKHWA, PUBLIC SERVICE COMMISSION, PESHAWAR
COMPETITIVE EXAMINATION FOR THE POSTS OF PROVINCIAL MANAGEMENT SERVICES (BPS-17) 2013
Accountancy and Auditing Paper-II
Time Allowed: 03 Hours
Max. Marks: 100
Note: Attempt any FIVE questions.
1. Crowley Inc., submit the following data for September:
- Direct labor cost: $30,000
- Cost of goods sold: $111,000
- Factory overhead is applied at the rate of 150% of direct labor cost
Inventory accounts showed these beginning and ending balances:
| Inventory Accounts | September 1 | September 30 |
|---|---|---|
| Finished Goods | $15,000 | $17,000 |
| Work in process | $9,000 | $13,000 |
| Materials | $7,000 | $7,400 |
Other data:
| Marketing expenses | $14,100 |
| General and administrative expenses | $22,900 |
| Sales for the month | $182,000 |
Required:
An income statement with schedule showing cost of goods manufactured and sold
(20 marks)
2. The following data are available:
| Standard cost per direct labor hour: | Product A | Product B |
|---|---|---|
| Fixed factory overhead | $ 1.00 | $ 1.00 |
| Variable factory overhead | $ 1.50 | $ 2.00 |
| Actual data: | ||
| Sales | 10,000 units | 12,000 units |
| Production | 8,000 units | 14,000 units |
Each product unit requires two hours of direct labor when operating at standard; fixed factory overhead was budgeted at $ 40,000; actual factory overhead was $ 125,000.
Required:
a. Factory overhead controllable and volume variance
b. Additional information required compute factory overhead variance using the three and four variance methods.
(10 + 10 marks)
3. Define ‘Audit’ and write a detailed note on the objectives of the independent auditor and conduct of the audit.
(5 + 15 marks)
4. Define ‘Internal Control’ and write a detailed note on the Systems of Internal Control in an organization.
(5 + 15 marks)
5. Mr. Ghaus is employed in a company after his retirement from army. Details of his income for the year ended 30th June, 2013 are as under:
| Basic Salary from company | Rs. 20,000 per month |
| Entertainment allowance | Rs. 1,000 per month |
| Contribution to unrecognized provident fund: | |
| Employee’s contribution | Rs. 15,400 per annum |
| Employer’s contribution | Rs. 15,400 per annum |
| Interest credited on provident fund during the year | Rs. 18,000 |
| Pension received from army | Rs. 48,000 per annum |
Notes:
- Mr. Ghaus has been provided a rent free accommodation by the company
- The company also provided him gas, water and electricity worth Rs. 39,000 free of charge.
- Mr. Ghaus has been provided a car by his employer for personal as well as official use. Car was purchased by employer for Rs. 450,000.
Required:
Calculate the taxable income of the Mr. Ghaus.
(20 marks)
6. Write detailed notes on any Two of the following Heads of Income:
- Salary
- Income from property
- Income from business or profession
- Capital gains
(10 + 10 marks)
7. Write a detailed note on advantages and disadvantages of long term financing. Also critically evaluate its role in the economic development of Pakistan.
(20 marks)
8. Write detailed note on following categories of ratios:
- Efficiency Ratios