KHYBER PAKHTUNKHWA PUBLIC SERVICE COMMISSION, PESHAWAR
COMPETITIVE EXAMINATION FOR THE POSTS OF PROVINCIAL MANAGEMENT SERVICES (BPS–17) 2010
Accountancy and Auditing Paper-II
Time Allowed: 03 Hours Max. Marks: 100
Note: Attempt any FIVE questions.
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1 The accounting department of the Ruthven Company provided the following data for May:
sales, $72,000; marketing expenses, 5%; administrative expenses, 1%; other expenses, 3% of sales; purchases, $36,000; factory overhead, 2/3 of direct labor; direct labor, $15,000
Beginning inventories:
Finished goods ………………………………… $7,000
Work in process ………………………………. 6,000
Materials ………………………………………… 8,000
Ending inventories:
Finished goods ………………………………… $10,200
Work in process ………………………………. 15,000
Materials ………………………………………… 8,500
Required:
1 Cost of goods sold statement.
2 Income statement.
(10+10 marks)
3 The normal capacity of a plant is 20,000 labor hours per month. At normal capacity, the budgeted factory overhead is $2.10 per direct labor hour, consisting of $12,000 fixed expense and $1.50 per hour variable expense. During June, the plant operated 18,000 direct labor hours, with actual factory overhead of $40,000. The standard for the capacity attained is 17,500 hours.
Required: An analysis of factory overhead using two, three and four variance methods. (20 marks)
4 Define ‘Audit’. Write a detailed note on advantages and disadvantages of continuous audit. (20 marks)
5 Write a detailed note on the principles of “Internal Control.” (20 marks)
6 The following incomes were earned by a salaried person during the year ended 30th June, 2010:
Basic salary: Rs. 5,000 p.m.
Bonus: Five months basic salary
Utility allowance: Rs. 6,000
House rent allowance: Rs. 20,000
Conveyance allowance: Rs. 12,000
Required:
Calculate the taxable income of the salaried person. (20 marks)
7 Write a detailed note on income exempt from income tax under Income Tax Ordinance 2001. (20 marks)
8 Discuss the mutual rights, liabilities and duties of different types of partners in a partnership. (20 marks)
9 Critically evaluate the role of following financial institutions in the economic development of Pakistan:
a Zarai Taraqiati Bank (Formerly Agricultural Development Bank of Pakistan)
b Pakistan Industrial Credit and Investment Corporation (PICIC)
(10+10 marks)
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