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FPSC · CSS 2020

Accountancy & Auditing, Paper I

100 marks · 3 hours · 4 questions
This paper Accountancy & Auditing · all yearsQ. 4 · The Wessal Karim Corporation is…Q. 6 · Sodius Chemical Inc. placed 220,000…Q. 8 · Umar Company produces baseball bats…Q. 29 · Received Rs.650 from customers for…With this paper← 20192020 →
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Part II

Q. 4
  1. (a)The Wessal Karim Corporation is considering installing a new conveyor for materials handling in a ware house.
  2. (b)breakage and other damages from handling will be reduced by Rs. 600 per month. Some of the firm's costs are expected to increase as follows: (a) Electricity cost will rise by Rs.200 per month, and (b) annual repair and maintenance of the conveyor will amount to Rs.999. Assume the firm uses the MACRS rules for depreciation in the 5-year property class. No salvage value will be recognized for tax purposes. The conveyor has an expected useful life of 8 years and a projected salvage value of Rs. 4,500. The tax rate is 35 percent. Estimate future cash inflows for the proposed project. Determine the projects NPV at 10 percent. Should the firm buy the conveyor? [10]
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Q. 6
  1. (a)Sodius Chemical Inc. placed 220,000 liters of direct materials into the mixing process. At the end of the month, 5,000 liters were still in process, 30% converted as to labor and factory overhead. All direct materials are placed in mixing at the beginning of the process and conversion costs occur evenly during the process. Sodius uses weighted-average costing. Determine the equivalent units in process for direct materials and conversion costs, assuming there was no beginning inventory. Determine the equivalent units in process for direct materials and conversion costs, assuming that 12,000 liters of chemicals were 40% complete prior to the addition of the 220,000 liters [10]
  2. (b).Asghar Manufacturing Company sells its products for Rs. 33 each. The current production level is 50,000 units, although only 40,000 units are anticipated to be sold. Unit Manufacturing Costs: Item Amount Direct materials Rs. 6.00 Direct manufacturing labor Rs. 9.00 Variable manufacturing costs Rs. 4.50 Total fixed manufacturing costs Rs. 180,000 Marketing expenses Rs. 3.00 per unit + Rs. 100,000 per year Required: (a) Prepare an income statement using absorption costing. (b) Prepare an income statement using variable costing. [10]
(20)
Q. 8
  1. (a)Umar Company produces baseball bats and cricket paddles.
  2. (b)Luqman Manufacturing Company — February Variance Analysis During February, the costing system reported several variances for the manufacturing of garden gates (its only product).
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SECTION–I

Q. 29

Received Rs.650 from customers for future service. Adjustment data consist of: Supplies on hand Rs.1,200. Accrued salaries payable Rs.400. Depreciation is Rs.100 per month. Unearned service revenue of Rs.1,450 is earned.

  1. (a)Journalize the September transactions. Prepare a trial balance at September 30.
  2. (b)Journalize and post adjusting entries. Prepare an adjusted trial balance.
  3. (c)Prepare an income statement and a retained earnings statement for September and a balance sheet at September 30.
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(20)

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The 2020 CSS Accountancy & Auditing paper set by the FPSC. Question wording only; questions marked “Not yet checked” have not been compared with the official paper yet.

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