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CSS past paper

CSS Accountancy and Auditing Paper I Past Paper 2023

CSS Accountancy and Auditing Paper I 2023 carries 100 marks over 3 hours. It has 7 questions.

Marks: 100
Time: 3 hours
Questions: 7

Years

How to attempt: Attempt ONLY FOUR questions from PART-II by selecting TWO questions from EACH SECTION. ALL questions carry EQUAL marks.

Questions

Question 1 (Part I) is the paper's MCQs, which are not reproduced here.

SECTION – I

Q. 2

(20)

(A)
What are the Accounting Principles? Define any four accounting principles shortly.
(5)
(B)
What are the Accounting Conventions? Define any four accounting conventions shortly.
(5)

(C)

The below mentioned balances are extracted from the books of Emerging Technologies Pvt. Ltd. as on 31st August 2022.

(10)

Head of Account	Amount
Sundry expenses	166,000
Opening Stock	400,000
Premises	3,775,000
Furniture	1,350,000
Machinery	2,600,000
Drawings	250,000
Purchases	6,455,000
Sales	12,262,000
Discount received	47,000
Discount allowed	54,000
Carriage outward	18,000
Returns inward	122,000
Return outwards	28,000
Closing Stock	372,500
Wages and salaries	1,750,000
Cash in hand	940,000
Rent, rates and taxes	137,000
Rent received in advance	53,000
Bills receivables	192,000
Trade creditors	2,076,000
Book debts	3,150,000
Bills payable	130,000
Bank loan	580,000
Capital	6,200,000
Carriage inward	17,000

Required: Prepare a Trial Balance as on that date in a proper format.

Q. 3
Deluxe Software Private Limited closes its books on 31st December every year. You are provided with the following data:
(20)
Shareholders Equity (Rs.’000’)
2021 2020
Opening 700 600
Profit after tax 220 200
920 800
Dividend (100) (100)
Closing 820 700
Other data
Number of Shares (in ‘000s) 60 60
Required:
- (a)
  On the basis of above data, compute the following for the year 2020 and 2021
  (5)
  - (a)
    Earnings per share (EPS)
  - (b)
    Return on closing equity (ROE)
  - (c)
    Book value per share (BV)
- (b)
  Compute dividend per share and rate of dividend for the year 2022.
  (5)
- (c)
  For the year ending 31st December 2022 the management decided to aim for EPS Rs.4.00 (9% higher than for the year 2021) and return on closing equity of 25%. Compute the estimated book value as at 31st December 2022 assuming that management targets are achieved. Also compute estimated figures for Profit after Tax, Dividend and Equity.
  (10)

Shareholders Equity (Rs.’000’)
	2021	2020
Opening	700	600
Profit after tax	220	200
	920	800
Dividend	(100)	(100)
Closing	820	700
Other data
Number of Shares (in ‘000s)	60	60

Q. 4

(20)

(A)

Post-closing Trial Balance of Premium Fabrics Private Limited for the year ended December 31, 2021 and 2022 are as follows:

(10)

	2022	2021
Equities and Liabilities
Issued and paid-up capital	5,000,000	5,000,000
Short-term running finance	3,000,000	800,000
Unappropriate profit	400,000	300,000
Trade Creditors	3,000,000	1,000,000
Accumulated Depreciation:
Plant and Machinery	900,000	600,000
Motor Vehicle	420,000	280,000
	12,720,000	7,980,000
Assets
Land and Building	2,500,000	1,500,000
Plant and Machinery	3,000,000	2,500,000
Motor vehicles	620,000	580,000
Stock in Hand	3,600,000	1,100,000
Trade debtors	3,000,000	2,300,000
	12,720,000	7,980,000

Additional data:

• During the year 2022, a dividend @ 10% was distributed to the shareholders. The paid-up value of each share is Rs. 10/-

• A Motor vehicle, having original cost of Rs. 100,000 and depreciated book value of Rs. 60,000 was sold for Rs. 80,000.

• Gross funds generated from operations during the year was Rs. 1,060,000.

Required: prepare a cash flow statement of Premium Fabrics as per IAS-7 for the year 2022.

(B)

Mr. Haider started a business on March 1st 2022 with a capital of Rs. 645,000. His newly appointed bookkeeper records transaction on simple papers. His cash book page shows following transactions for the year.

(10)

Particulars	Amount	Particulars	Amount
Expenses Paid	27,500	Sales on cash	322,000
Receipts from debtors	241,000	Drawings of Mr. Haider	25,500
Purchase of Motorbike	92,000	Payments to creditors	322,000
Purchases on cash	148,000

On December 31st 2022 value of closing stock is 46,000. The payables and receivables are Rs.125,000 and Rs. 80,000 respectively. Useful life of motorbike is 8 years and salvage value will be 32000. Bookkeeper decided to use the straight-line method of depreciation for the whole useful life of motorbike.

Required: Prepare Trading and Profit and Loss account and Balance Sheet as on 31st December 2022.

SECTION – II

Q. 5
(20)
- (A)
  Eagle Star is a manufacturing company. The Company uses Rowan Premium bonus scheme for its workers payroll. Workers are also entitled to dearness allowance of Rs. 2,400 per week of 48 hours. Mr. Afzal is one of the workers of that company. His basic wage rate is 1,200 per day of 8 hours. His time sheet for the week is as under:
  (10)
  Job Name Time Allowed Time Taken
  Crafting 25 hours 20 hours
  Assembling 30 hours 20 hours
  Idle time (Waiting) ----- 8 hours
  Required: Calculate gross wage of Mr. Afzal for the week.
- (B)
  An Automobile factory will use 500,000 tyres for its production in coming year. The incremental cost of placing an order is Rs. 8,000. The cost of storing a tyre for whole year is Rs. 2000.Lead time on an order is 5 days and the company wishes to keep reserve supply of two days usage. Usage per day will be constant in whole work year. Company work year consists of 250 days.
  (10)
  Required: Calculate Economic Order Quantity and Reorder point.

Job Name	Time Allowed	Time Taken
Crafting	25 hours	20 hours
Assembling	30 hours	20 hours
Idle time (Waiting)	-----	8 hours

Q. 6

(20)

(A)

A manufacturing company of Lahore submits the following information for the year ending 31st December 2022:

(10)

Particulars	Amount	Particulars	Amount
Sales	4,500,000	Raw Material 1st January	150,000
Purchases	2,020,000	Finished Goods 1st January	700,000
Tools Expenses	45,000	Indirect Labour	50,000
Depreciation of Plant	45,000	Power, Heat & Light	30,000
Work in process 1st January	300,000	Finished Goods 31st December	605,000
Purchase Retunes	20,000	Depreciation of machinery	60,000
Fire Insurance	8,000	Raw Material 31st December	290,000
Direct Labour	590,000	Work in Process 31st December	250,000
Misc. Manufacturing Costs	9,000	Indirect Material Consumed	50,000
Selling Expenses	5% of sales	Administrative Expenses	2% of sales

Required: Prepare an Income Statement for the year ended 31st December 2022

(B)
Khizra manufacturing corporation has fixed cost for the year ended 31st December 2022 is Rs. 400,000. Variable cost per unit is Rs. 20. Each Unit sells at Rs. 100.
(10)
Required:
- (a)
  Break Even point (both in units and value)
  (2)
- (b)
  If turnover for the next year is Rs. 800,000, calculate the estimated contribution and profit, assuming the cost and selling price remain the same
  (4)
- (c)
  A profit target of Rs. 400,000 has been desired for the next year. Calculate the turnover required to achieve the desired result.
  (4)

Q. 7

The Balance Sheet of Fazal Din & Co. as on 31st December 2021 was as follows:

(20)

BALANCE SHEET
Liabilities & Capital	Amount	Assets	Amount
Current Liabilities	Rs. 17,500	Cash	Rs. 5,000
Paid-up-Capital		Accounts Receivable	Rs. 10,000
3,000 ordinary shares of Rs. 10 each	Rs. 30,000	Materials	Rs. 4,000
Retained Earnings	Rs. 10,000	Work in Process	Rs. 2,000
		Finished Goods	Rs. 6,000
		Prepaid expenses	Rs. 500
		Fixed Assets(net)	Rs. 30,000
	Rs. 57,500		Rs. 57,500

During the year 2022 the retained earnings increase 50% as a result of good business. No dividend was paid during the year. Balances of Accounts receivables, prepaid expenses, current liabilities and paid-up capital were the same as 31st December 2022 as they had been on 31st December 2021, Inventories were reduced as follows:

Material	50%
Work in process	50%
Finished goods	33-1/3%

Fixed Assets were reduced by depreciation of Rs. 4,000 charged 3/4th to factory overhead and 1/4th to administrative expenses. Sales were made of Rs. 60,000 on account of finished goods costing Rs. 40,000. Direct labor cost was Rs. 9,000. Factory overhead was applied at the rate of 100% of direct labor cost, leaving Rs. 2,000 under applied which was closed to cost of goods sold account. Total marketing and administrative expenses amounting to 10% and 15% respectively of the gross sales.

Required:

(a)
An Income statement for 2022, along with the details of Cost of goods manufactured and sold
(10)
(b)
A balance Sheet as on 31st December 2022.
(10)

Q. 8
A chemical factory manufactures three kinds of chemicals namely Eucalyptus oil, Hexachlorobenzen and Toxaphene. In the last week of December 2022, the records were:
(20)
Labor Grade No of Employees Rate per hour (Rs.) Hours Worked by each employee
I 12 40 40
II 36 32 42
III 8 28 40
IV 2 16 44
Output and standard times during the same week were as follows:
Components Output (In Units) Standard Minutes for each unit
Eucalyptus oil 888 30
Hexachlorobenzen 1800 54
Toxaphene 960 66
Normal working hours per week are 38. Overtime is paid at the premium of 50 % of the normal hour rate.
Group Incentive Scheme:
A group incentive scheme is in operation. The time saved is expressed as a percentage of hours worked and is shared between the group as a proportion of the hours worked by each grade. The incentive rate is 75% of the normal hour rate.
Required: Prepare the payroll for the last week of December 2022 showing the basic pay, overtime and incentive amount as separate totals for each grade of labor.

Labor Grade	No of Employees	Rate per hour (Rs.)	Hours Worked by each employee
I	12	40	40
II	36	32	42
III	8	28	40
IV	2	16	44

Components	Output (In Units)	Standard Minutes for each unit
Eucalyptus oil	888	30
Hexachlorobenzen	1800	54
Toxaphene	960	66

Part-II is to be attempted on the separate Answer Book.
Attempt ONLY FOUR questions from PART-II by selecting TWO questions from EACH SECTION. ALL questions carry EQUAL marks.
All the parts (if any) of each Question must be attempted at one place instead of at different places.
Write Q. No. in the Answer Book in accordance with Q. No. in the Q.Paper.
No Page/Space be left blank between the answers. All the blank pages of Answer Book must be crossed.
Extra attempt of any question or any part of the question will not be considered.
Use of Calculator is allowed.