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Page 1 of 4
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA DECEMBER 2013, 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.
The following is the Trial Balance of M/S Aziz & Co. as on December 31, 2010:
Debit(Tk.)
Credit(Tk.)
Capital
7,05,000
Sales
18,98,550
Purchase
12,97,500
Sales Returns
5,250
Accounts Receivable
1,24,500
Cash
63,000
Petty Cash
7,500
Bank Account
3,67,500
Notes Receivable
18,000
Notes Receivable Discounted
15,000
Office Supplies
25,500
Prepaid Insurance
15,750
Accounts Payable
1,87,500
Notes Payable
75.000
Allowance for Bad Debts
9,000
Inventory (1-1-2010)
3,75,000
Delivery Equipment
4,05,000
Accumulated Depreciation- Delivery Equipment
2,02,500
Furniture and Fixtures
1,12,500
Accumulated Depreciation – Furniture and Fixtures
22,500
Machinery and Equipment
3,75,000
Accumulated Depreciation – Machinery and Equipment
75,000
Retained Earnings
69,000
Advertising
18,000
Delivery Salaries
54,000
Office Salaries
39,000
Interest Income
15,450
Interest Expenses
24,000
Suspense Account
52,500
33,27,000
33,27,000
The following adjustments are to be made on December 31, 2010 before closing the books:
1. Inventory on hand at December 31, 2010 Tk. 3,90,000
2. Office supplies Tk. 10,500
3. Bad debt allowance is to be increased by Tk. 12,000
4. Depreciation is to be charged: Delivery Equipment-10%, Furniture & Fixture-15% and
Machinery & Equipment-5%
5. Accrued delivery salaries Tk. 18,000
6. Pre-paid insurance Tk. 5,250
7. Unearned interest income Tk. 1,500
8. Delivery Equipment purchased 5 years back, with Book Value of Tk. 37,500 sold out at
Tk. 52,500 and erroneously credited the sale proceeds to Suspense Account.
9. Advertising expense includes Tk. 8,100 for new product to be sold in 2011.
Page 2 of 4
CMA DECEMBER 2013, EXAMINATION
FOUNDATION LEVEL
SUBJECT : 001. PRINCIPLES OF ACCOUNTING.
Q. No. 1. (cont’d……………)
Required:
(i) Prepare a multiple- step income statement for the year and a classified balance sheet
as on December 31, 2010.
(ii) Pass adjusting and closing entries. [Marks: (15+5) = 20]
Q. No. 2.
(a) Define Revenue as per IAS 18.
(b) A Tk. 210,000 fixed-price contract is entered into for the provision of services. At the
end of 2007, the first accounting period, the contract is thought to be 33% complete
and costs of Tk. 45,000 have been incurred in performing that 33% of the work.
Required:
Calculate the revenue to be recognized in 2007 on the alternative assumptions that:
(i) The costs to complete are reliably estimated at Tk. 90,000; and
(ii) The costs to complete cannot be reliably estimated and it is thought that Tk.
40,000 of the costs incurred are recoverable from the customer.
Fill in the proforma below:
(i) Cost to complete are Tk. 90,000.
(ii) Cost to complete cannot be estimated reliably.
(c) LATENTILE LTD
Latentile Ltd. is a newly-formed company, which uses a chemical process to
manufacture a revolutionary new roof covering, which it sells at a mark-up of 25% on
cost. Its inventories consist of raw material, work in progress and finished goods, and
at the end of its first year of trading, it is having problems valuing inventories.
You ascertain the following information:
(1) Raw material
(i) The process needs at least 100,000 kgs of clay to continue working, but a
physical inventory count reveals that the machinery contains 108,000 kgs.
(ii) The original cost of the initial 100,000 kgs to set up the process was 30p
per kg and you find an invoice to show that the last consignment of 20,000
kgs cost 31p per kg. All other consignments in the year (a total of 200,000
kgs) cost 32p per kg.
(2) Work in progress
(i) The work in progress is currently all 60% complete and you discover that
there are 50,000 units currently going through the process.
(ii) The total number of complete units for the period was, as anticipated,
800,000.
(iii) The costs for the process for the period were as follows.
Tk. ’000
Raw materials 200
Direct labour 242
Factory overheads 191
Administrative expenses attributable to production 114
Distribution costs 90
(3) Finished Goods
(i) There were 70,000 units in inventories.
(ii) Of (i) above, it was intended to sell 20,000 units at 75p per unit, a discount
of one third on normal selling price, in a future promotional campaign (a
further 10p per unit distribution costs is to be incurred).
Required:
(i) Explain how BAS 2 Inventories applies the accrual and the going concern bases of
accounting.
Page 3 of 4
CMA DECEMBER 2013, EXAMINATION
FOUNDATION LEVEL
SUBJECT : 001. PRINCIPLES OF ACCOUNTING.
Q. No. 2.(cont’d……………)
(ii) For each of the above categories of inventory, suggest a method of valuation and show
the value as it would appear in the balance sheet.
(iii) If the information regarding costs for the period were not available, suggest an
alternative method of valuing finished goods. [Marks: (4+8+8) = 20]
Q. No. 3.
(a) Explain the term “bank reconciliation” and state the reasons for its preparation.
(b) ABC, a sole trader received his bank statement for the month of June 2001. At that
date the bank balance was Tk. 706,500 whereas his cash book balance was Tk.
2,366,500. His accountant investigated the matter and discovered the following
discrepancies:
1. Bank charges of Tk. 3,000 had not been entered in the cashbook.
2. Cheques drawn by ABC totaling Tk. 22,500 had not yet been presented to the
bank.
3. He had not entered receipts of Tk. 26,500 in his cashbook.
4. The bank had not credited Mr. ABC with receipts of Tk. 98,500 paid into the bank
on 30 June 2001.
5. Standing order payments amounting to Tk. 62,000 had not been entered into the
cashbook.
6. In the cashbook ABC had entered a payment of Tk. 74,900 as Tk. 79,400.
7. A cheque for Tk.15,000 from a debtor had been returned by the bank marked
“refer to drawer” but had not been written back into the cashbook.
8. ABC had brought forward the opening cash balance of Tk. 329,250 as a debit
balance instead of a credit balance.
9. An old cheque payment amounting to Tk. 44,000 had been written back in the
cashbook but the bank had already honored it.
10. Some of ABC’s customers had agreed to settle their debts by paying directly into
his bank account. Unfortunately, the bank had credited some deposits amounting
to Tk. 832,500 to another customer’s account. However acting on information
from his customers ABC had actually entered the expected receipts from the
debtors in is cashbook.
Required:
(i) A statement showing ABC’s adjusted cashbook balance as at 30 June 2001.
(ii) A bank reconciliation statement as at 30 June 2001.
[Marks: 5+15 = 20]
Q. No. 4.
(a) Briefly explain the nature and purpose of accounting for depreciation.
(b) (i) A motor van was bought for Tk. 20,000 on 1 September 2005 with a residual value of
Tk. 2,000. Depreciation was charged at 20% by the reducing balance method on yearly
basis. It was sold for Tk. 18,000 after three years of use on 30 September 2008.
Compute the profit on sale of asset.
(ii) A company is exploring the impact of the two method of depreciation. On 1 January, it
bought machinery for Tk.15,000. The methods are (i) straight line where useful life is 4
years and residual value is Tk. 2,000 and (ii) Reducing balance method - at the rate of
20% per annum. Show how the company's profit be affected if the straight line method
is used rather than the reducing method?
(iii) A machine was bought for Tk.100,000. Its estimated useful life is four years with a
residual value of Tk.10,000. Depreciation is charged on the straight line method. What
is the percentage of depreciation rate on an annual basis?
Page 4 of 4
CMA DECEMBER 2013, EXAMINATION
FOUNDATION LEVEL
SUBJECT : 001. PRINCIPLES OF ACCOUNTING.
Q. No. 4. (cont’d……………)
(iv) A machine which was bought for Tk.180,000 on 30 April 2008. The residual value was
Tk. 5,000 and depreciation rate was 25%. Depreciation is to be charged under the
reducing balance method on month to month basis. Compute the depreciation at 31st
December 2008.
(v) A fixed asset cost Tk.100,000 had a book value of Tk. 40,000. It was sold for
Tk.10,000. What is the provision for depreciation sold? [Marks: 5 + (3+3+3+3+3) = 20]
Q. No. 5.
Careg Ltd manufactures and sells heavy plant. The company also hires out plant for monthly
periods (or multiples thereof). You ascertain the following details:
(1) Freehold land:
Freehold land was acquired on 1 February 2008 for Tk. 100,000 to build a new factory.
Due to planning difficulties, building has not yet been started. The directors wish to
revalue the land to its fair value of Tk.130,000 at 30 September 2009.
(2) Buildings:
On 1 October 2008 the directors reviewed the useful life of the buildings and determined
that the remaining life was 56 years. The buildings were acquired for Tk. 200,000 on 1
October 2004, when their useful life was estimated at 40 years.
(3) Plant and Machinery:
Plant and machinery is accounted for under the cost model accounting policy and is
depreciated at the rate of 40% per annum based on carrying amount. Such plant has an
estimated life of five years.
(i) Plant which cost Tk. 20,000 on 1 October 2006 was classified as held for sale on 1
February 2009. The sale was agreed at Tk. 5,600 and completed on 31 March
2009.
(ii) New plant acquired cost Tk. 60,000 on 1 January 2009.
At 1 October 2008 the cost of plant and machinery (not leased) was Tk. 200,000, with
accumulated depreciation of Tk. 72,000.
(4) Computer:
Previously this has been depreciated on a straight-line basis at the rate of 10% per
annum on cost. The computer was acquired on 1 January 2007 for Tk. 60,000, and by
the beginning of this accounting year Tk.10,500 of depreciation had been charged. In an
effort to charge out computer time to departments, a record is now kept of computer time
used. Management wishes to depreciate the computer on a usage basis. The
manufacturer’s estimate of total usage time of the computer’s life is 40,000 hours. The
data processing manager estimates that some 10,000 hours have been worked prior to
the current accounting period. During the current year the record shows 4,800 hours
worked. The computer will have a scrap value of Tk. 4,500 at the end of its useful life.
Required:
(i) Prepare the schedule of non-current assets which will form the note to the company’s
published balanced sheet at 30 September 2009.
(ii) Briefly explain the qualitative characteristics contained in BFRS-1 Framework for the
Preparation and Presentation of Financial Statements illustrating your answer with
reference to the provisions of BAS 16 Property, Plant and Equipment.
[Marks: (16+4) = 20]
=THE END =
Page 1 of 2
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA DECEMBER 2013, EXAMINATION
FOUNDATION LEVEL
SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT.
Time: Three Hours
Full Marks:100
Answer THREE questions from each part, where Q. No. 4 and 8 are compulsory.
Answer must be brief, relevant, neat and clean.
Use fresh sheet for answering each question.
GROUP – A : BUSINESS COMMUNICATION
Q. No. 1.
(a) Define Business Communication. What are the conditions of communication?
(b) Discuss the requirements of effective Communication.
(c) What are the main problems of communication in the business enterprise of Bangladesh?
[Marks: (5+5+5) = 15]
Q. No. 2.
(a) What are the forms of upward communication?
(b) Discuss the process to write a Cover Letter.
(c) XYZ Enterprise wishes to place an order with Asian Paints Ltd. for various paints. Prepare
an order using imaginary terms and conditions.
[Marks: (4+5+6) = 15]
Q. No. 3.
(a) Write your resume with a forwarding letter to the H.R. department of XYZ. Ltd. for the
suitable post in Finance department.
(b) What is corporate annual report? What is the difference between statutory meeting and
statutory reports?
(c) Write a business report to be placed on the board meeting regarding the market position of
an export oriented manufacturing industry.
[Marks: (4+5+6) = 15]
Q. No. 4.
Write short notes on any FIVE of the following:
(a) Short Analytical Report;
(b) Oral Communication;
(c) Bill of Exchange;
(d) Central Depository system (CDS);
(e) Organization chart;
(f) Letter of credit;
(g) Certificate of Incorporation;
(h) EPB;
(i) SAFA.
[Marks: (4 x 5) = 20]
Page 2 of 2
CMA DECEMBER 2013, EXAMINATION
FOUNDATION LEVEL
SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT.
GROUP – B : OFFICE MANAGEMENT
Q. No. 5.
(a) Define the term “Inter office relationship”. Discuss the main features stating nature of office
work.
(b) Office management is the task of planning, coordinating and motivating the efforts towards
the specific objective in the office. Discuss.
(c) Why “noise control” is essential and how it can be achieved?
[Marks: (5+5+5) = 15]
Q. No. 6.
(a) What is the meaning of Industrial Engineering?
(b) How “Time Study” and “Motion Study” increase the productivity of an organization?
(c) What factors would you consider before selecting a suitable filing system?
[Marks: (5+5+5) = 15]
Q. No. 7.
(a) What is motivation? Discuss the business ethics in the office.
(b) Describe the procedure for maintaining incoming and outgoing mail of an office.
(c) Discuss the position of office manager in the organization.
[Marks: (6+5+4) = 15]
Q. No. 8.
Write short notes on any FIVE of the following:
(a) Office automation.
(b) Job description and Job Specification.
(c) Security and secrecy.
(d) File server & Exchange server.
(e) Transference and good governance.
(f) Code of conduct in the organization.
(g) Scientific Office Management.
(h) Page indexing.
[Marks: (4 x 5) = 20]
= THE END =
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA DECEMBER 2013, EXAMINATION
FOUNDATION LEVEL
SUBJECT: 003. QUANTITATIVE TECHNIQUES.
Time: Three hours
Full Marks: 100
Answer any TEN questions, FIVE from each part.
Answer must be brief, relevant, neat and clean.
Use a fresh sheet for answering each question.
Start answering each question from a fresh sheet.
PART – A: BUSINESS MATHEMATICS
Q. No. 1.
(a) The universal set is given by
},20:{ <∈= xxxU N,
and
},14,8,6,2{=A
},14,10,8,4{=B
}.18,14,12,10,6{=C
Find (i)
,'' BA ∪
(ii)
),''( BAC ∪∩
(iii)
).( CBA −∩
(b) Out of the total 150 students who appeared in an examination, 45 failed in Accounting, 50
failed in Business Mathematics, and 45 in Costing. Those who failed both in Accounting
and Business Mathematics were 30, those who failed both in Business Mathematics and
Costing were 32, and those who failed both in Accounting and Costing were 35. The
students who failed in all three subjects were 25. Find out the number of students who
failed at least in any one of the subjects. [Marks: (5+5) = 10]
Q. No. 2.
(a) Income of a man from interest and wages is Tk.5000. He doubles his interest and also
gets an increase of 50% in wages and his income increases to Tk.8000. What was his
original income separately in terms of interest and wages?
(b) Tk.15,000 is invested at the beginning of 1998. It remains invested and on 1st January
each subsequent year, another Tk.600 is added to it. What sum will be available on 1st
January 2005 if interest is compounded annually at the rate of 4% per annum?
[Marks: (5+5) = 10]
Q. No. 3.
(a) A factory produces 400 bulbs for a total cost of Tk.1600 and 800 bulbs for a total cost of
Tk.2400. Given that the cost curve is a straight line, find the equation of the straight line
and use it to find the cost of producing 5000 bulbs.
(b) A manufacturer has a fixed cost of Tk.60,000 and variable cost is Tk.9 per unit of
production. Selling price is Tk.12 per unit.
(i) Write the revenue and cost functions.
(ii) At what number of units will break-even occur?
