NATIONAL OFFICERS ACADEMY

Mock Exams for CSS-2021

December Mocks
ACCOUNTANCY AND AUDITING, PAPER-I
TIME ALLOWED: THREE HOURS PART-I (MCQS) MAXIMUM MARKS = 20
PART-I(MCQS): MAXIMUM 30 MINUTES PART-II MAXIMUM MARKS = 80
NOTE: (i) Part-II is to be attempted on the separate Answer Book.
(ii) Attempt FOUR Questions from PART-II, selecting TWO questions from EACH SECTION.
ALL Questions carry EQUAL marks
(iii) All the parts (if any) of each Question must be attempted at one place instead of at different places.
(iv) Candidate must write Q. No. in the Answer Book in accordance with Q. No. in the Q.Paper.
(v) No Page/Space be left blank between the answers. All the blank pages of Answer Book must be
crossed.
(vi) Extra attempt of any question or any part of the attempted question will not be considered.
(vii) Use of calculator is allowed.
PART – II
SECTIONA - I

Q – 2 (a) , On January 1, 2015, Hydri Construction acquired a small excavator for Rs.85,000. This device had a 4-year service
life. It is expected that the equipment will be sold for Rs.10,000 salvage value at the end of 4 years. The
company uses the double-declining balance depreciation method.
(a) Prepare a schedule showing annual depreciation expense, accumulated depreciation and related
calculations for each subsequent year.
(b) Show how the asset and related accumulated depreciation would appear on a balance sheet at
December 31, 2015.
(c) Prepare journal entries to record the asset's acquisition, annual depreciation for each year, and the
asset's eventual sale for Rs.10,000.
(b).Rabika Limited has the following balance sheet and income statement for 2015 (in
thousands rupees)
Balance sheet
Cash Rs. 400 Accounts payable Rs. 320
Accounts receivable 1,300 Accruals 260
Inventories 2,100 Short-term loans 1,100
Current assets 3,800 Current liabilities 1,680
Net fixed assets 3,320 Long-term debt 2,000
Shareholders’ equity 3,440
Total assets 7,120 Total liabilities & Equity 7,120
Income Statement
Net sales (all credit) Rs. 12,680
Cost of goods sold* 8,930*
Gross profit Rs. 3,750
Selling, general, and admin expenses 2,230
Interest expense 460
Profit before taxes Rs. 1,060
Taxes 390

Profit after taxes Rs. 670

* Includes depreciation of Rs. 480
On the basis of this information, compute the following:
Current ratio
Acid test ratio
Average collection period
Inventory turnover ratio
Debt to net worth ratio
Gross profit margin
Net profit margin
Rate of return on common stock equity
Q-3 The following information is available:
Trial Balance as at December 31, 2012.

Particulars Debit Rs. Credit Rs.

Capital 6400000
Drawings 1813800
Goodwill 3618200
Land & Buildings 2400000
Plant & Machinery 1600000
Loose Tools 120000
Bills Receivable 145800
Bills Payable 1352000
Creditors 3068840
Purchase Returns 106000
Sales 8720000
Stock, 1st Jan 2011 1677800
Purchases 2050800
Wages 858000
Carriage Outward 22160
Carriage inward 55000
Coal & gases 234160
Salaries 1414560
Rent, Rates & Taxes 113000
Discount 60520
Cash at Bank 1016840
Cash in Hand 18600
Sundry Debtors 1800000
Repairs & maintenance 74600
Printing & Stationery 20600
Bad Debts 48520
Advertisements 140840
Sales Returns 85000
Furniture 48000
General Expenses 210040
19646840 19646840
The following adjustments are to be made:
1. Closing Stock as on December 31, 2011 was Rs 1400000.
2. Depreciation is to be provided on the following assets:
― Plant & Machinery 10 %
― Loose Tools 10 %
― Furniture 10 %
― Land & Buildings 2.5 %
3. Provide for the following payables:
― Wages – Rs. 60000
― Advertisements – Rs. 20000
― Salaries – Rs.120000
― Repairs & Maintenance – Rs. 15000
4. Provide 5 % on the debtors against bad debts and 2 % against discounts.
Required:- Prepare Trading, Profit & Loss Account and Balance Sheet as at December 31, 2011 from the
above Data.
Q 4: A, B, and C were partners sharing profits and losses in the ratio of 2:2:1. C decided to retire on December
31, 2013. The following is the balance sheet of partnership firm
Balance sheet
December 31, 2013

Liabilities Rs. Assets Rs.

Sundry Creditors 10000 Stock of goods 10000
Reserve account 2000 Sundry Debtors 10000
Capital account A 24000 Bills receivable 4000
Capital account B 16000 Bank A/c 10000
Capital account C 12000 Land and building 30000
64000 64000

A and B decided to share profits and losses in the ratio of 3:2 in future. Goodwill is valued at Rs. 10000.
Land and building was appreciated by Rs.6000 and stock by Rs.2000. There was bad debt loss of Rs.1000
but not recorded in books. A and B decided to bring sufficient cash to settle the account of C and to make
their capital proportionate. They also decided to maintain Rs.15000 bank balances for meeting the day to
day business expenses.

Prepare necessary journal entries and prepare balance sheet of newly constituted firm.

SECTION - II

Q. 5 . The records of the Electronic Equipment Company show the following information for
the year ended 31 December 2015:

( Rs.)
Material purchased 1,946,700
Inventories, January 1, 2015:
1) Finished goods (100 calculator) 43,000
2) Material 268,000
Direct labour 2,125,800
Factory overhead 764,000
Marketing expense 516,000
General and administrative expenses 461,000
Sales (14,200 calculators) 6,634,000

Inventories, December 31, 2015:

1. No unfinished work on hand.
2. Finished goods (200 calculators) costed at Rs.395 each.
3. Material 167,000

Required:
An income statement for the period.
The number of units manufactured.
The unit cost of calculators manufactured.
The gross profit per unit sold.
The income per unit sold.
The ratio of gross profit to sales.
The income to sales percentage.
Q. 6. Seven Seas Ltd. has developed a process for the manufacture of after-shave. Material is added at
the beginning of the process and conversion costs are incurred uniformly. Detail for the month
ended December 31,2015 are as follows:
Work-in-process at 1st December, 2015: 4,000 Units 75 % complete.
Work-in-process at 31st December, 2015: 15,000 Units 60% complete
Units added in process during the month of December, 2015: 30,000 units.
Materials Conversion cost
Value of opening work-in-process (Rs.) 108,000 85,000
Cost added during December , 2015 300,000 475,000

Required: Using weighted average basis, prepare a cost of production report for the process for
December, 2015. Showing:

(a). A quantity schedule; (3)

(b). Cost charged to process; (4)
(c). Cost of equivalent units; (5)
(d). Cost of finished goods; (4)
(e). Value of closing work-in-process (4)

Q-7. (a) Define characteristics difference between Fixed Cost and Variable Cost.
(b) Following information of the manufacturing unit is made available to you for the month July 1996.

BUDGET DATA:
Units ………………………………. 1000
Material used …………………. 3 kg per unit @ Rs. 20 per kg
Labour per unit ………………. 2 hours
Labour rate per hour ……… Rs. 10.00

FACTORY OVERHEADS:
Fixed ………………. Rs. 10,000
Variable ……….…. Rs. 20,000

ACTUAL PERFORMANCE:
Units completed …………….. 900
Materials used ……………….. 2750 kg at Rs. 22 per kg
Labour hours worked …….. 1850 hours at Rs. 11 per hour

Required:
Compute Two Variance for each of the following items
a) Materials
b) Labour
c) Factory overheads
Q.8. Using the information given below, prepare Cash Budget showing expected Cash Receipts and Disbursements
for the month of April, 2007 and the Cash Balance expected as of April 30, 2007.
· Bank Loan due on April 10, Rs.90,000 plus Rs.4,500 interest.
· Depreciation for April, Rs.2,100.
· Two years Insurance Policy due April 14, for renewal Rs.1,500 to be paid in cash.
· Cash Balance March 31, Rs.80,000.
· Merchandise purchases for April Rs.500,000, 40% paid in the month of purchase, 60% paid in next month.
· Account receivable as of March 31, Rs.60,000 from February sales, Rs.450,000 from March sales.
· Salaries due in April Rs.90,000.
· Other expenses for April, payable in April Rs.45,000.
· Accrued taxes for April, payable in June 2007 Rs.7,500.
· Sales for April Rs.1,000,000, half collected in the month of sale, 40% in next month, 10% in third month.
· Accounts payable March 31, Rs.460,000.

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