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CSS 2023 Accountancy & Auditing Paper 1
What are the Accounting Principles? Define any four accounting principles shortly.
What are the Accounting Conventions? Define any four accounting conventions shortly.
The below mentioned balances are extracted from the books of Emerging Technologies Pvt. Ltd. as on 31st August 2022.
Prepare a Trial Balance as on that date in a proper format.
Post-closing Trial Balance of Premium Fabrics Private Limited for the year ended December 31, 2021 and 2022 are as follows:
| Equities and Liabilities | 2022 | 2021 |
| 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:
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.
| Particulars | Amount | Particulars | Amount |
| Expenses Paid | 27,500 | Sales on cash | 322,000 |
| Receipts from debtors | 241,000 | Purchase of Motorbike | 92,000 |
| Payments to creditors | 322,000 | Drawings of Mr. Haider | 25,500 |
| 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.
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:
| Job Name | Time Allowed | Time Taken |
| Crafting | 25 hours | 20 hours |
| Assembling | 30 hours | 20 hours |
| Idle time (Waiting) | 8 hours |
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.
Required: Calculate Economic Order Quantity and Reorder point.
A manufacturing company of Lahore submits the following information for the year ending 31st December 2022:
| 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
Break Even point (both in units and value)
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
A profit target of Rs. 400,000 has been desired for the next year. Calculate the turnover required to achieve the desired result.
A chemical factory manufactures three kinds of chemicals namely Eucalyptus oil, Hexachlorobenzen and Toxaphene. In the last week of December 2022, the records were:
| Labor Grade | No of Employees | Rate per hour (Rs.) | Hours Worked by each employee |
| I | 12 | 40 | 40 |
| II | 15 | 32 | 42 |
| III | 8 | 28 | 44 |
| IV | 2 | 16 | 40 |
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.
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