IAS Mains Commerce 2006

Time Allowed: 3 hours Maximum Marks: 300

Candidates should attempt Questions I and 5 which are compulsory, and any three of the remaining questions selecting at least one question from each Section.
Paper I
Section A

Answer any three of the following questions. The answer of each question should not exceed 200 words

Accounting is the language of business. Discuss
What are the functions of Cost Accounting?

What are the deductions that are to be made in computing total income?

Critically examine the terms true and fair that are used in Auditors Report.

Answer the following questions

Define Goodwill. Explain in detail different methods of valuation of goodwill

Prepare a Flexible Budget from the following data made available in respect of half-yearly period and forecast the working results at 85% and 100% of capacity when the respective sales are Rupees 50 lakhs, Rupees 60 lakhs and Rupees 85 lakhs. While fixed expenses remain constant, semi-variable expenses also remain constant between 55% and 75% of capacity, increasing by 10% between 75% and 90% and 100% of capacity. The expenses at 60% capacity are as follows:
Semi-variable Rupees in lakhs
Maintenance and Repair 1.25
Indirect Labour 5.00
Sales Department Expenses 1.50
Sundry Overheads 1.25

Variable Rupees in lakhs

Materials 12.00
Labour 13.00
Other Expenses 2.00


Fixed Rupees in lakhs

Wages and Salaries 4.20
Rent Rates and Taxes 2.80
Depreciation 3.50
Sundry Overheads 4.50
51.00









Answer the following questions

What is Share as understood from Company Accounts? When and why does the question of valuation of share arise? What are the different methods of valuation of share

Draft a comprehensive Capital Reduction Scheme taking into account appropriate imaginary figures

Answer the following questions

Explain the Civil Liability of a Company Auditor

Discuss the relevant provisions of Income Tax concerning Salary

Section B

Answer any three of the following questions. The answer of each question should not exceed 200 words:

Finance is the lifeblood of business. Discuss

Explain the concept of Money Market

Explain the nature and scope of Capital Budgeting

What is Credit Management

Answer the following questions

What is Financial Management? Explain its nature, scope and objectives

Information:

I Year II Year III Year

Return on Capital 15% 12%

Margin on Sale

From the above information, you are asked to find out the reason for decline of ROC. What should be your recommendation to improve ROC

Answer the following questions

Explain the concept of valuation. How are firms Fixed Income Securities and Common Stocks valued

X and Co. Is desirous to purchase a business and has consulted you, and one point on which you are asked to advise them is the average amount of working capital, which will be required in the first years working. You are given the following estimates and instructed to add 10% to your computed figure to allow for contingencies Figures for the year Rs.

Average amount locked up for swats:

Stock of Finished Product


Stock of Stores, Materials

Stocks 000


Stocks 000

Average credit given:
Inland Sales-6 weeks credit
Export Sales-11
Sales 2 weeks credit 12, 000 78, 000

Lag in payment of wages and other outgoings:
Wages-11 − 2 weeks
Stores, Materials, etc. 11 − 2 months
Rent, Royalties, etc. 6 months
Clerical Staff-½ month
Manager-½ month
Miscellaneous Expenses-11 − 2 months
Expenses 60, 000
Expenses 48, 000
Expenses 10, 000
Expenses 62, 000
Expenses 800
Expenses 48, 000

Payment hi advance: Sundry Expenses (paid quarterly in advance) 000

Undrawn Profits on the average throughout the year 11, 000

Set up your calculations for the average amount of working capital required

Answer the following questions

Explain in detail the System of Consortium with your comments

Explain in detail the Theories of Dividend

Time Allowed: 3 hours Maximum Marks: 300

Candidates should attempt Questions I and 5 which are compulsory, and any three of the remaining questions selecting at least one question from each Section.