C. S. (MAIN) EXAM,


COMMERCE AND ACCOUNTANCY
Paper-I
Time Allowed Three Hours Maximum Marks 300
INSTRUCTIONS

Each question is printed both in Hindi and in English.

Answers must be written in the medium specified in the Admission Certificate issued to you, which must be stated clearly on the cover of the answer-book in the space provided for the purpose. No marks will be given for the answers written in a medium other than that specified in the Admission Certificate.

Candidates should attempt Question Nos. 1 and 5 which are compulsory, and any three of the remaining questions selecting at least one question from each Section.

Assume suitable data if considered necessary and indicate the same clearly. All questions carry equal marks.

SECTION-A

1. Attempt any THREE of the following in not more than 200 words each (20x3=60)

Describe the basic information processing model of an accounting system. 20
Explain the audit procedure for conducting the audit of a Non-governmental Organization (NGO). 20
"Maximising the value of the company to its shareholders is consistent with the company exercising considerable social responsibilities." Discuss. 20
Comment on any likely conflict of interest between the sales manager and the finance manager of a company, with regard to the company's credit policy. 20

2. A limited company issued a prospectus inviting applications for 2,000 equity shares of Rs. 10 each at a premium of Rs. 2 per share payable as follows
On application Rs.
On allotment Rs. 5 (including premium);
On first call Rs.
On second and final call Rs. 2
Applications were received for 3,000 shares and pro-rata allotment was made on the applications for 2,400 shares. Money overpaid on applications was employed on account of sum due on allotment. Shree, to whom 40 shares were allotted, failed to pay the allotment money and on her subsequent failure to pa} the first call, her shares were forfeited. Pooja, the holder of 60 shares, failed to pay the two calls, and her shares were forfeited after second call.
Of the shares forfeited, 80 shares were reissued to Naman credited as fully paid Rs. 9 per share, the whole of Shree shares being included.
Pass the necessary journal entries and prepare the cash book of the company. 30

Describe the disclosure requirements for amalgamation including additional disclosure, if any, for different methods of amalgamation as per AS-14. 30

3. IGNOU conducts a special course on computer applications for a month during summer. For this purpose, an entrance examination held which is spread over four days, one examination per day. Each candidate is charged fee of Rs. 50 for taking up the entrance test. The following data was gathered for the past two years
<img src='./qimages/17-3a.jpg'>
You are required to compute:
The budgeted net revenue if 4,000 candidates take up the entrance test in 2009-10.
The break-even nllltlber of candida??.
The number of candidates to be enrolled if the net revenue of Rs. 20,000 is desired. 5+15+10

A certain chemical process yields 75% of material introduced as main product and 20% as by-product, being lost. In the process one unit of main product requires double the materials required for a unit of by-product. Further one unit of main product needs 1 times the time needed for one unit of by-product. Overheads are absorbed in the ratio 3 1. During a month 4,000 units of raw materials at a cost of Rs. 68,000 were introduced. Wages and overheads incurred were Rs. 21,200 and Rs. l 800 respectively and wastage realised Rs. 1,200. Ascertain the cost of both the products and prepare Process Account. 30

4. Mrs. Ganga received the following amounts dwing the financial year 2008-09 Gross Salary <img src='./qimages/17-4a.jpg'> <img src='./qimages/17-4a1.jpg'>

R Ltd. is considering a new automatic blender. The new blender would last for 10 years and would be depreciated to zero over the 10 year period. The old blender would also last for 10 more years and woald be depreciated to zero over ·die same 10 year period. The old blender has a book value of Rs. 10,000 but could be sold for Rs. 15,000 (the original cost was Rs. 20,000). The new blender would cost Rs. 50,000. It would reduce labour expense by Rs. 8,000 a year. The company is subject to a 50% tax rate on regular income and a 30% tax rate on capital gains. Their cost of capital is 8%. There is no investment tax credit in effect.
Identify all the relevant cash flows for this replacement decision.
Compute the present value, net present value and profitability index.
Is this an attractive project



SECTION-B

5. Comment on any THREE of the following in not more
than 200 words each (20x3=60)

Requirements of Accounting Standard-II for Foreign Exchange Transactions. 20
Diluted Earning per share. 20
Cost-Volume-Profit Analysis. 20
Activity Based Costing and its salient features.20

6. Below are given some figures relating to three companies carrying on the same type of business, for the year 2008-09. State which company, in your opinion, has put in the best performance and has followed the best financial policies <img src='./qimages/17-6a.jpg'> <img src='./qimages/17-6a1.jpg'>

What are divisible profits Explain various provisions of Companies Act regarding distribution of dividends. What is duty of an auditor in this regard 3 0

7. The standard mix for each batch of 100 units of
product A is
Material A 6 kgs. Rs. 15
Material B 4 kgs. Rs. 10
During a month 10 batches were completed with actual consumption as follows
Material A 63 kgs. Rs. 14
Material B 39 kgs. Rs. 11
Actual output during the month was 960 units. Calculate Material Cost Variances for detailed analysis and control. 30
Sandeep submits the following information for the assessment year 2009- 1 0 <img src='./qimages/17-7b.jpg'>

8. Write a note on Money Market and Capital Market
in India. 30

Explain how VAT is an improvement over the old sales tax structure.
What do you mean by 'taxable services?? in the context of service tax How is the value of taxable services determined 15+ 15=30

Note English version of the In structions is printed on the front cover of this question paper.

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