Time: 3 Hours
Marks: 100
NB:
1. Question Nos. 1 and 6 are compulsory and answer any two from the remaining fromeach section.
2. Figures to the right indicate full marks.
3. Working notes should form part of answer.
4. Answer both the sections in the same answer-book.
Q.1 (a) What is Internal Control? What are its objectives? (10)
(b) What are the advantages and limitations of test check in auditing? (8)
Q.2 (a) What are the responsibilities of an Auditor for errors and frauds? (8)
(b) What are the qualities an Auditor should possess? (8)
Q.3 (a) Discuss the disclosure requirements relating to "Current Assets, Loans of Advances". as per Schedule VI of the Companies Act, 1956. (8)
(b) What are the duties of a company Auditor? (8)
Q.4 (a) What are the different types of Audit Report? Explain them in brief. (8)
(b) As an Auditor how will you make a scrutiny of the following Ledger Account? (8)
| In the books of m/s Ramesh, Rakesh and Ram's Capital A/c | |||||
|---|---|---|---|---|---|
| Dr. | Cr. | ||||
| Date | Particulars | - | Date | Particulars | - |
| 2005 -2006 | - | Rs. | 2005 -2006 | - | Rs. |
| April 3 | To Ramesh Capital A/c. (ForGoodwill) | 1,60,000 | April 2 | By Bank A/c | 16,00,000 |
| April 3 | To Rakesh Capital A/c. (For Goodwill) | 2,40,000 | March 31 | By Salaries A/c. | 4,80,000 |
| Dec. 20 | To BankA/c. | 1,60,000 | March 31 | By Interest on Capital A/c. | 32,000 |
| March 24 | To Bank A/c. | 1,40,000 | March 31 | By P/L App: A/c. | 86,000 |
| March 30 | To Goods A/c. | 40,000 | - | - | - |
| March 31 | To Interest on Drawings | 12,000 | - | - | - |
| March 31 | To Balance C/d | 14,46,000 | - | - | - |
| - | Total | 21,98,000 | - | Total | 21,98,000 |
Q.5 Write short notes on any four of the followings:- 16
(a) Reappointment of a retiring Auditor of a company.
(b) Auditor's right of access to books of account.
(c) Vouching of preliminary expenses.
(d) Objectives of window dressing.
(e) Auditing in computer environment.
Q.6 Following is the Trading and Profit and Loss Account of M/s Vishal Enterprises for the year ended 31-3-2006. 20
| Particulars | Rs. | Particulars | Rs. |
| To Opening Stocks (500 units) | 17,500 | By Sales (10250 units) | 7,17,500 |
| To Materials | 2,60,000 | By Closing Stock (250 units) | 12,500 |
| To Wages | 1,50,000 | - | - |
| To Factory Overheads | 94,750 | - | - |
| To Gross Profit c/fd | 2,07,750 | - | - |
| Total | 7,30,000 | Total | 7,30,000 |
| To Administrative Overheads | 1,06,000 | By Gross Profit c/fd | 2,07,750 |
| To Selling Overheads | 55,000 | By Dividend Received on Investments | 10,250 |
| To Loss on Revaluation of Assets | 9,000 | - | - |
| To Net Profit | 48,000 | - | - |
| Total | 2,18,000 | Total | 2,18,000 |
In Cost Accounts, materials charged @ Rs. 25 per unit and wages @ Rs. 15 per unit. Factory overheads taken @ 60% of wages. Administrative overheads applied @ 20% of works cost. Selling overheads taken @ Rs. 6 per unit sold.
You are required to prepare:
(1) Statement of Cost showing total cost and cost per unit.
(2) Statement of Reconciliation of Profit/Loss.
Q.7 A product passes through three processes. The following cost data have been extracted from the books of manufacturing company:- (15)
| Particulars | Total | |||
| Rs. | I | II | III | |
| Material | 1,50,840 | 52,000 | 39,600 | 59,240 |
| Direct Wages | 1,80,000 | 40,000 | 60,000 | 80,000 |
| Production Overhead | 1,80,000 | - | - | - |
10,000 units at Rs. 6 each were introduced into process I. There was no stock of material or work-in-progress at the beginning or at the end. The output of each process passes directly to the next process and finally to the finished stock. Production overhead is recovered at 100% of Direct wages. The following additional data are obtained:-
| Process | Output unit | Percentage of Normal loss to input | Value of Scrap per unit |
| I | 9,500 | 5% | 4 |
| II | 8,400 | 10% | 8 |
| III | 7,500 | 15% | 10 |
Prepare Process Accounts and Abnormal Loss Account/Gain Account and Normal Loss Account
Q.8 The following information relates to a building contract undertaken by M/s. Asmit Ltd. for Rs. 10,00,000 and for which 80% of the value of work certified by the architect is being paid by the contractee.:- (15)
| Particulars | I Year | II Year | III Year |
| Material Issued | 1,20,000 | 1,45,000 | 84,000 |
| Direct Wages | 1,10,000 | 1,55,000 | 1,10,000 |
| Direct Expenses | 5,000 | 17,000 | 6,000 |
| Indirect Expenses | 2,000 | 2,600 | 500 |
| Work Certified | 2,35,000 | 7,50,000 | 10,00,000 |
| Uncertified Work | 3,000 | 8,000 | - |
| Plant Issued | 14,000 | - | - |
| Material on Site | 2,000 | 5,000 | 8,000 |
The value of plant at the end of I, II and III year was Rs. 11,200 Rs. 7,000 and Rs. 3,000 respectively. Prepare Contract Account for these three years.
Q.9 (a) M/s Dinesh & Co. produces an article by mixing two inputs. The following standards have been set up for the input.:- (15)
| Material | Standard Mix | Standard Mix |
| - | - | per kg. |
| X | 40% | Rs. 4 |
| Y | 60% | Rs. 3 |
The Standard Loss in processing is 15%. During December, 2006 the company produced 1,700 kg. of finished output. The actual position of inputs were as under.
| Material | Purchases | Rate |
| - | (kg.) | - |
| X | 830 | 4.25 per kg |
| Y | 1,190 | 2.50 per kg |
| - | 2,020 | - |
Calculate Material Cost Variance, Material Price Variance and Material Usage Variance.
(b) A company has a fixed cost or Rs. 3,00,000. On sale of 15,000 units which is equal to 40% of margin of safety, it earned a profit of Rs. 60,000 Calculate the following:
(a) BEP in units.
(b) Total present sales in units.
(c) Total units sold at which it suffered loss of Rs. 62,492.
If the present fixed cost increases by 15%, what is revised BEP in units and how many units should be sold to earn a profit of Rs. 1,15,000?
Q.10 Write short notes on any three : 15
(a) Fixation of cost for the issue of materials for production.
(b) Batch Costing.
(c) Different basis of overhead allocation.
(d) Advantages of cost accounting.
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