THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL-2013 EXAMINATION FOUNDATION LEVEL SUBJECT: 001.

PRINCIPLES OF ACCOUNTING. Time: Three hours All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Full Marks: 100

Q. No. 1. (a) Keanu Reeves started the Reeves Repair Shop on 1st May, 2012 introducing Tk. 950,000 capital. His capital consist Tk. 200,000 cash, and equipment worth Tk. 750,000. On May, he completed the following transactions: May 02: Paid Tk. 10,000 cash for store rent for the month of May. 03: Purchase equipment for Tk. 120,000 from Lorence Auto Parts Ltd., paying 40% cash and signing a 6-month, 12% note payable for the remaining balance. 05: Paid Tk. 12,000 for one year accident insurance policy. 08: Receive bill from the daily news for advertising the opening of the repair shop Tk. 3,600. 12: Provide repair service to Hi-Fi Electronics Tk. 60,000. (60% cash and 40% on account). 15: Hire a secretary at a salary of Tk. 1,000 per month who will work from next month. 17: Made a contract with a client for service to be provided on June and collect Tk. 35,000 cash. 22: Collect 40% of balance due from Hi-Fi Electronics. 26: Paid Tk. 1,400 on account for advertisement incurred on May 08. Required: Show the effect of above transactions in accounting equation. The column headings should be: Cash + Equipment + Account Receivables + Prepaid Insurance = Accounts Payable + 12% Notes Payable + Unearned Revenue + Reevess Capital Consider the following situations involve accounting principles and assumptions: (i)

(b)

Asmita Enterprise owns buildings that are worth substantially more than they originally cost. In an effort to provide more relevant information, Asmita Enterprise reports the buildings at market value in its accounting report. (ii) Susan & Sons includes in its accounting records only transaction data that can be expressed in terms of money. (iii) Runin, sole proprietor of H & S Corporation, records her personal living costs as expenses of the corporation. Required: Identify and explain which principle or assumption has been violated (or supported) in each of the three situations listed above. (c) Hulks Bay accepted an engagement in January performs the work in February and is paid in April. If Hulks Bay prepares monthly financial statements, when should it recognize revenue from this engagement? Why? [Marks: (10+6+4) = 20] Q. No. 2. (a) Amos Company assigned a Tk. 100,000 residual value to a machine that cost Tk. 900,000 and was depreciated over an eight-year life. At the end of the ninth year, assuming the machine is not sold or scrapped, what amounts, if any, will appear on the balance sheet? Explain your reasoning.
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CMA APRIL, 2013 EXAMINATION FOUNDATION LEVEL SUBJECT: 001. PRINCIPLES OF ACCOUNTING Q. No. 2. (Contd.) On January 1, 2011, CANTON Company had Accounts Receivable Tk. 27,100 and Allowance for Doubtful Accounts Tk. 2,350. CANTON Company prepares financial statements annually. During the year the following selected transactions occurred. Jan. 5 : Sold Tk. 3,000 of merchandises to Goppy Brooks Company, terms n/30. Feb. 2 : Accepted a Tk. 3,000, 4-month, 12% promissory note from Goopy Brooks Company for balance due. Feb. 12 : Sold Tk. 3,600 for merchandise to Goni Company and accepted Goni's Tk. 3,600 two-month.10% note for balance due. Feb. 26 : Sold Tk. 2,500 of merchandise to Matin Co. terms n/10. April. 5 : Accepted a Tk. 2,500, 3- month, 8% note from Matin Co, for balance due. April. 12 : Collected Goni Company note in full. June. 2 : Collected Goppy Brooks Company note in full. July. 5 : Matin Co. dishonors its note of April 5. It is expected that Matin will eventually pay the amount owed. July. 15 : sold Tk. 1,500 of merchandise to Treet Inc. and accepted Treet's Tk. 1,500, 3-month, 12% note for the amount due. Oct. 15 : The Treet Inc. note was dishonored. Treet Inc. is bankrupt, and there is no hope of future settlement. Required: Journalize the transactions. [Marks: (5+15) = 20] Q. No. 3. (a) Ulfat Enterprise received a Tk. 24,000, 60 day, 10% note dated December 1 from Alfaz Enterprise. Ulfats accounting period ends on December 31 every year. Answer the following required questions for Ulfat Enterprise. Required: (i) Journalize the adjusting entry for accrued interest on December 31. (ii) Journalize if the note is honored on the maturity date. (b) You are provided with the following information for CRIPSON Inc. for the month ended June 30, 2012, CRIPSON uses the periodic method for inventory. Date Description Quantity Unit cost or Selling Price 1 Beginning Inventory 25 Tk.30 4 Purchases 85 Tk.32 10 Sales 70 Tk.45 11 Sales return 10 Tk.45 18 Purchases 35 Tk.34 18 Purchase return 5 Tk.34 25 Sales 50 Tk.42.50 28 Purchase 20 Tk.36 Required: Calculate (1) ending inventory, (2) Cost of goods sold, (3) Gross profit and (4) Gross profit rate under each of the following method: June (i) LIFO (ii) FIFO (iii) Average Cost. [Marks: (5+15) = 20] Q. No. 4. (a) Mr. Rahman is the sole proprietor of a small business. He is planning to borrow some money for his business which requires submitting financial statements. Rahman kept records of all his business transaction properly. But when he was preparing his balance sheet he became quite confused about what should be the balance of cash at bank. Balance as per the cash book is Tk. 150,750 whereas, the bank statement showed balance of Tk. 78,525. Suggest Mr. Rahman regarding the mentioned issue. (b)

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CMA APRIL, 2013 EXAMINATION FOUNDATION LEVEL SUBJECT: 001. PRINCIPLES OF ACCOUNTING Q. No. 4. (Contd.) (b) The cashbook of Y Ltd. showed a balance of Tk. 41,004 on 31st December 2011. It received the bank statement from The City Bank Ltd. in the first week of January 2012. The balance shown by the statement is Tk. 44,380 on 31st December 2011. The following data were available for recording the statement: (i) The bank charges Tk. 76, which was not yet recorded by the company. (ii) The company mailed a deposit of Tk. 7,000 on December but not appeared on the bank statement. (iii) Cheques issued in December but not charged to the December bank statement. Cheque No : 007 008 009 010 (iv) Tk. 300 8,000 62 1,640

The company has not yet recorded the interest of Tk. 1,200 collected by the bank in December. (v) The bank returned one of our customers cheques of Tk. 400 with the bank statement and marked it as NSF. The bank recorded it as a payment from the bank balance. (vi) The company identified that it incorrectly recorded it as a payment of Tk. 262 to an account as payable as Tk. 622. (vii) A cheque for P Company in the amount of Tk. 710 that had been incorrectly charged to Q Company by the bank. Required: Prepare a bank reconciliation statement as on 31st December 2011. [Marks: (5+15) = 20] Q. No. 5. The following was the Balance Sheet of A,B and C sharing profits and Losses in the proportion of 6 /14,5/14 and 3/14 respectively:A, B and C Balance Sheet Liabilities & Equity Amount (Taka) Assets Amount (Taka) Creditors 37,800 Land and Building 1,00,800 Bills Payable 12,600 Furniture 14,700 Reserve 14,000 Stock 58,800 Capital: A: 79,800 Debtor 52,920 B: 67,200 Cash at Bank 17,780 C: 33,600 1,80,600 2,45,000 2,45,000 They agreed to take 'D' in to partnership and give him 1/8 share of profits on the following terms: 1. That 'D' brings in Tk. 32,000 as his capital. 2. That Furniture be written down by Tk. 1,840 and stock be depreciated by 10%. 3. That provision of Tk. 2,640 be made for outstanding repair bills. 4. That the value of Land and Building be written up to Tk. 1,30,200. 5. That the value of goodwill be fixed at Tk. 17,640. 6. That the capitals of A, B and C be adjusted on the basis of D,s capitals by opening current accounts. Required: Give the necessary journal entries and the Balance Sheet of the firm as newly constituted. [Marks: 20] =THE END=

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION FOUNDATION LEVEL SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT. Time: Three Hours Full Marks:100 Answer THREE questions from each part, where Q. No. 4 and 8 are compulsory. Answer must be brief, relevant, neat and clean. Use a fresh sheet for answering each question. Start answering each question from a fresh sheet GROUP A : BUSINESS COMMUNICATION Q. No. 1. (a) Why do we write reports? Discuss. (b) List and explain the main factors to be considered while writing a report. (c) Your CEO is planning to hire an Accountant for the company. You are required to draft an advertisement to be published in the local daily newspaper. [Marks: (4+6+5) = 15] Q. No. 2. (a) Define non-verbal communication. (b) A speaker must read the reaction of his/her audience correctly Examine the statement giving example of various types of audience cues. (c) A well written business letter is a way to create goodwill between the writer and the receiver Justify. [Marks: (4+6+5) = 15] Q. No.3. (a) Suppose that in response to an advertisement recently published in THE DAILY STAR, you are interested to apply for the post of Secretary of XYZ Company. Draft the application. (b) Write a letter on behalf of the HR Manager of the above company inviting you for an interview for the above post. (c) Suppose that you have been selected for the above post. Draft an appointment letter to be issued to you on behalf of the HR Manager of the company. [Marks: (6+4+5) = 15] Q. No. 4. Write short notes on any FIVE of the following: (a) Internet; (b) Asset Management Company; (c) Brokers & Dealers; (d) Online Banking; (e) Foreign remittance; (f) NBFI; (g) NGO; (h) Registrar of Joint Stock Companies; (i) WTO. [Marks: (5x4) = 20]

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CMA APRIL 2013, EXAMINATION FOUNDATION LEVEL SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT. GROUP B : OFFICE MANAGEMENT Q. No. 5. (a) What do you mean by selection of office location? (b) What are the factors to be considered in selecting an office building site? (c) Discuss the effects of the office environment on employees. [Marks: (3+6+6) = 15] Q. No. 6. (a) How does a modern office differ from a traditional office? (b) State the major functions of office management. (c) Explain the effects of office automation on the performance of employees. [Marks: (5+5+5) = 15] Q. No. 7. (a) Briefly describe the steps involved in the process of selecting office employees. (b) What factors should you consider in designing an appropriate training program for the office employees? (c) Explain, in brief, any two of the available methods for appraising the performance of office employees. [Marks: (5+5+5) = 15] Q. No. 8. Write short notes on any FIVE from the following. (a) Indexing; (b) Disposition of records; (c) Electronic filing; (d) Office manual; (e) Fringe benefits; (f) Work measurement; (g) Organization structure; (h) Office ethics. [Marks: (5x4) = 20] ==THE END==

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013 EXAMINATION FOUNDATION LEVEL SUBJECT: 003. QUANTITATIVE TECHNIQUES. Time : Three hours Answer any TEN questions, FIVE from each Part. All questions carry equal marks. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. PARTA: BUSINESS MATHEMATICS Q. No. 1. (a) Define a power set. Find the power set P(S) of the set S = {a, b, c}. (b) In a class of 25 students, 12 students have taken Mathematics; 8 have taken Mathematics but not Economics. Find the number of students who have taken Mathematics and Economics and those who have taken Economics but not Mathematics. Display in Venn diagram. [Marks: (4 + 6) = 10] Q. No. 2. (a) If Tk. 1,000 is deposited in an account at the end of every quarter for the next 10 years, how much will be in the account at the time of the final deposit if interest is 10% compounded quarterly? Find the compound interest on Tk. 10,00,000 for 5 years if interest is payable half-yearly, the rate for the first two years being 8% p.a. and for the next 3 years 10% p.a. [Marks: (5 + 5) = 10] Q. No. 3. (a) (b) Prove that Full Marks: 100

(b)

cos sin + = 1 tan 1 cot

2 sin(

+ ).

A firm invests Tk. 10,000 in a business which has a net return of Tk. 500 per year. An investment of Tk. 20,000 would yield an income of Tk. 2,000 per year. What is the linear relationship between investment and annual income? What would be the annual return on an investment of Tk. 12,000? [Marks: (5 + 5) = 10] Q. No. 4. (a) If f(x)= 2x 2 (x + 2) (x-1), find f ( x ) . Find (i)
3

(b)

x3 dx ; ( x + 1) 3
2

(ii)

/2

( e x +sinx) dx [Marks: (4 + 6) = 10]

Q. No. 5. (a) In a mercantile firm 4 posts fall vacant and 25 candidates apply for the posts. In how many ways can a selection be made : (i) If one particular candidate is always included? (ii) If one particular candidates is always excluded? (b) If xy = ex-y; Prove that

log x dy = dx (1 + log x ) 2
[Marks: (5 + 5) = 10] Page 1 of 3

CMA APRIL 2013 EXAMINATION FOUNDATION LEVEL SUBJECT: 003. QUANTITATIVE TECHNIQUES Q. No. 6. A manufacture has a fixed cost of Tk. 1,20,000 and variable cost of Tk. 20 per unit made and sold. Selling price per unit is Tk. 50. Required: (a) Write revenue and cost equations using c for cost and q for number of units. (b) Compute profit if 10,000 units are made and sold. (c) Find the break-even quantity. (d) Find the break-even volume of sales. (e) Construct the break-even chart, labeling all the characteristics. [Marks: (5 x 2) = 10] Q. No. 7. (a) Solve the following system of equations by matrix method: 5x 6y + 4z = 15 7x + 4y 3z = 19 2x + y + 6z = 46 (b) The production function of a commodity is given Q = 40F + 30F2 -

F3 , where Q is the 3

total output and F is the units of input. Required: (i) Find the number of units of input required to give maximum output. (ii) Find the maximum value of marginal product. (iii) Verify that when the average product is maximum, it is equal to marginal product. [Marks: (5 + 5) = 10] PART B : BUSINESS STATISTICS Q. No. 1. a) Distinguish between Primary and Secondary Data. Outline some sources of secondary data in Bangladesh. b) The accompanying table shows the weights in kg of 40 students: 54 56 56 59 60 62 62 66 67 68 68 70 70 73 73 73 75 77 78 79 79 81 78 68 63 53 50 56 52 58 59 58 68 60 61 63 60 54 65 68 Construct a frequency distribution taking appropriate class interval. [Marks: (4+6) = 10] Q. No. 2. a) Define Central Tendency. What are its usual measures? Discuss them in brief. b) The following table shows the age of some people living in a locality. Age (in Years) 0 9 10 19 20 29 30 39 40 49 50 59 60 69 No. of People 17 22 13 21 18 7 3 Calculate mean, median and mode of the data. Locate 3rd quartile by the graph. [Marks: (4+6) = 10]

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CMA APRIL 2013 EXAMINATION FOUNDATION LEVEL SUBJECT: 003. QUANTITATIVE TECHNIQUES Q. No. 3. a) What are different measures of variation? Why standard deviation is considered to be the best measure? b) Draw an ogive curve for the following distribution and hence calculate the number of workers earned monthly wages below Tk.3800. Monthly Wages 20002500 25003000 30003500 35004000 4000- 4500 (in Tk.) No. of Workers 6 10 22 30 16 [Marks: (4+6) = 10] Q. No. 4. a) Define correlation and regression analysis? What is scatter diagram? Explain the following values of r with the help of diagrams: (i) r = 0; (ii) r = - 1; (iii) r = +1. b) A study was made on the amount of converted sugar in a certain process at various temperatures. The data were recorded as follows: Temperature(x) 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0 Converted Sugar(y) 8.1 7.8 8.5 9.8 9.5 8.9 8.6 10.2 9.3 9.2 9.9 i) Draw a scatter diagram. (ii) Determine the coefficient of correlation. iii) Interpret the strength of the correlation coefficient. iv) Determine the coefficient of determination and interpret. [Marks: (4+6) = 10] Q. No. 5. a) Define probability of an event. State the elementary properties of probability. Prove the additive law of probability. b) Define mutually exclusive events and independent events. Two dice are tossed. Show the sample space. A be the event that both dice show same number and B be event that the sum of the scores of two dices is more than 9. Check whether the events A and B are mutually exclusive or independent. [Marks: (4+6) = 10] Q. No. 6. a) Define normal distribution with their important properties. What type of errors are committed in testing hypothesis? What about the power of the test? b) The Thompsons Discount Appliance Store issues its own credit card. The credit manager wants to find whether the mean monthly uppaid balance is more than Tk.400. The level of significance is set at 0.05. A random check of 172 unpaid balance revealed the sample mean is Tk. 407 and the standard deviation of the sample is Tk. 38. Should the credit manager conclude the population mean is greater than Tk. 400? [Marks: (5+5) = 10] Q. No. 7. a) What do you mean by survey? Define census and sample survey with examples. Discuss the advantages of a sample survey over census. b) Define the following terms with example: Null hypothesis, Simple hypothesis, Composite hypothesis, Parametric hypothesis, Type-I error. [Marks: (5+5) = 10] = THE END = Page 3 of 3

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION FOUNDATION LEVEL SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS. Time: Three Hours Full Marks:100 Answer FIVE questions, taking at least TWO from each group A and B. Show computations where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet GROUP A : BUSINESS ECONOMICS Q. No. 1. (a) Describe how price is determined in a Perfectly Competitive market. (b) Distinguish between (i) Economies of scope and Economies of scale (ii) Private investment and Public investment. (c) When 100 units of output are produced, the average cost of production (AC) is Tk. 300. If average cost of production (AC) increases to Tk. 400 with an increase in output by one unit, what is the marginal cost of producing the 101st unit? [Marks: (8+6+6) = 20] Q. No. 2. (a) Public-Private Partnership (PPP) investment policy is beneficial for Bangladesh economy. Do you support this statement? Explain. (b) State the conditions of Total Product (TP), Average Product (AP) and Marginal Product (MP) under different stages of Law of Variable Proportion. (c) Calculate GDP and National Income from the following data: (Tk. In crores) Net domestic product 12,433 Depreciation 1,832 Net foreign factor income 133 Statistical discrepancy 136 Indirect business taxes 983 Corporate profits 1,477 Interest and miscellaneous payments 778 Social security taxes 996 Transfer payments 1,869 Capital income 2,038 Personal taxes 1,461 [Marks: (8+5+7) = 20] Q. No. 3. (a) Define Managerial Economics. (b) Illustrate key ways in which Managerial Economics help in Managerial Decision-making. (c) Distinguish between (i) Free Goods and Economic Goods (ii) Public goods and Private goods. [Marks: (5+10+5) = 20] Q. No. 4. (a) Distinguish between Revenue and Development budget in the context of Bangladesh Government. What are the sources of revenue in the governments budget? (b) What is Deficit Financing? What are its relative advantages and disadvantages? [Marks: (10+10) = 20]

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CMA APRIL 2013, EXAMINATION FOUNDATION LEVEL SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS. Q. No. 5. (a) How is equilibrium price determined in the market? (b) What is elasticity of demand? Discuss the factors that determine elasticity of demand. (c) Calculate price elasticity, income elasticity and cross elasticity from the following figures of a firm selling product X: Years Sales in quantity Price per unit of Price per unit of Per capita of X (no. of units) X in Taka Y in Taka income in Taka 2002 50,000 50 20 20,000 2012 80,000 30 25 30,000 [Marks: (4+6+10) = 20] GROUP B : INTERNATIONAL BUSINESS Q. No. 6. (a) Describe the factors influencing International Business. (b) Illustrate the impacts of Exchange Rate changes in Importing to and Exporting from Bangladesh. (c) Explain why International Tax Conflict arises and how to resolve it. [Marks: (7+6+7) = 20] Q. No. 7. (a) Explain the salient barriers faced by Bangladeshi Traders in Import and Export Business. (b) Discuss the important features of the different stages of International Product life Cycle. (c) Distinguish between Country-based theory and Firm-based theory. [Marks: (8+7+5) = 20] Q. No. 8. Write short notes on any FIVE of the following: (a) Multinational Corporation (MNC); (b) Disguised unemployment; (c) Trade facilitation; (d) Transfer Income; (e) WTO; (f) Board of Investment (BOI); (g) Non-Tariff Barriers; (h) Back to back letter of credit. [Marks: (5 x 4) = 20] ==THE END==

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 101.INTERMEDIATE FINANCIAL ACCOUNTING. Time: Three Hours All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Full Marks:100

Q. No. 1. During the financial year 2012, Muttakeen Limited had the following transactions: (i) On 1st January 2012 Muttakeen Limited purchased new asset of Farhana PLC for Tk. 720,000. The face value of Farhana PLCs identifiable net assets was Tk. 344,000. Muttakeen Limited is of the view that due to popularity of Farhana PLCs products, the life of resulting goodwill is unlimited. (ii) On the February 2012, Muttakeen Limited, purchased a lease license to operate toll collection service of Bhadursha Park from the Dhaka City Corporation for Tk. 120,000 and at an annual fee of 1% of collecting revenue. The lease license expires after 5 years. Collecting revenues were Tk. 40,000 during financial year 2012. Muttakeen Limited projects future revenue of Tk. 80,000 in 2013 and Tk. 120,000 per annum for 3 years thereafter. (iii) On 5th April 2012, Muttakeen Limited was granted a patent that had been applied for by Farhana PLC. During 2012, Muttakeen Limited incurred legal costs of Tk. 102,000 to register the patent and an additional Tk.170,000 to successfully prosecute a patent infringement suit against a competitor. Muttakeen Limited expects the patents economic life to be 10 years. Muttakeen Limited follows an accounting policy to amortize all intangibles on straight line basis over the maximum period permitted by accounting standard taking a full year amortization in the year of acquisition. Required: (a) Prepare a schedule showing the intangible section as per BAS in Muttakeen Limited Statement of Financial Position at 31st December 2012. (b) Prepare a schedule showing the related expenses that would appear in the Statement of Comprehensive Income of Muttakeen Limites for 2012. (c) One of the characteristics of financial statements is neutrality- Do you agree with this statement? (d) What is Off Balance Sheet Items? (e) What do you mean by Post balance sheet events? Explain. [Marks: {(8+6)+2+2+2} = 20] Q. No. 2. (a) As per IAS -7 Para 10, Cash Flows must be analysed between operating, investing and financing activities. Being a professional accountant how you will explain operating, investing and financing activities? (b) Balance Sheet of 3M Limited is given below: 3M Limited Balance Sheet As at 31.12.2011 31.12.2012 Liabilities (Tk.) (Tk.) Share Capital ( 50,000 shares @ Tk. 10/- each) 500,000 500,000 9% Debentures 200,000 160,000 Sundry creditors 230,000 216,000 Profit and Loss A/c 40,000 54,000 Depreciation fund 80,000 88,000 Contingency reserve 140,000 110,000 Outstanding expenses 30,000 48,000 12,20,000 11,76,000 Page 1 of 5

Q. No. 2. (Contd..)

Assets Land & building Machinery Stock-in-trade Sundry debtors Cash & bank balances Current Investment Prepaid expenses

300,000 164,000 200,000 170,000 120,000 262,000 4,000 12,20,000

300,000 180,000 228,000 162,000 110,000 190,000 6,000 11,76,000

The following information is furnished: (i) One old machinery which has original cost of Tk. 30,000 was sold for Tk.10,000. The accumulated depreciation in respect of the said machinery amounts to Tk.16,000. (ii) One new machinery was acquired for Tk. 46,000. (iii) 9% Debentures were redeemed at a discount of 4% of their face value. (iv) Dividend at 12% was declared and paid in cash. (v) Income-tax liability of Tk. 30,000 paid was debited to contingency reserve. Required: Prepare a Cash Flow Statement in accordance with the Bangladesh Accounting Standard -7(BAS-7) [Marks: (4 +16) = 20] Q. No. 3. Hosaf Ltd. is a public company that would like to acquire (100%) a suitable private company. It has obtained the following draft financial statements for two companies, Padma Ltd. and Jamuna Ltd. They operate in the some industry and their managements have indicated that they would be receptive to a takeover. Income statements for the year ended 30 September 2008 Padma Ltd. Jamuna Ltd. Tk. 000 Tk. 000 Tk. 000 Revenue 12,000 20,500 Cost of sales (10,500) (18,000) Gross profit 1,500 2,500 Operating expenses (240) (500) Finance costs-loan (210) (300) - overdraft nil (10) - lease nil (290) Profit before tax 1,050 1,400 Income tax expense (150) (400) Profit for the year 900 1,000 Note: dividends paid during the year 250 700 Statements of financial position as at 30 September 2008 Profit for the year 900 1,000 Assets Non-current assets Freehold factory [note (i)] 4.400 nil Owned plant [note (ii)] 5,000 2,200 Leased plant [note (ii)] Nil 5,300 9,400 7,500 Current assets Inventory 2,000 3,600 Trade receivables 2,400 3,700 Bank 600 5,000 nil 7,300 Total assets 14,400 14,800

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Q. No. 3. (Contd..) Equity and liabilities Equity shares of Tk. 1 each Property revaluation reserve Retained earnings Non-current liabilities Finance lease obligations [note (iii)] 7% loan notes 10% loan notes Deferred tax Government grants Current liabilities Bank overdraft Trade payables Government grants Finance lease obligations [note (iii) Taxation Total equity and liabilities 2,000 900 2,600 nil 3,000 Nil 600 1,200 nil 3,100 400 nil 600 3,500 5,500 nil 800 3,200 nil 3,000 100 nil 1,200 3,800 nil 500 200 2,000 800 2,800

4,800

6,300

4,100 14,400

5,700 14,800

Notes: (i) Both companies operate from similar premises. (ii) Additional details of the two companies plant are: Padma Ltd. Jamuna Ltd. Tk. 000 Tk. 000 Owned plant cost 8,000 10,000 Leased plant original fair value Nil 7,500 There were no disposals of plant during the year by either company. (iii) The interest rate implicit within Jamuna Ltd.s finance leases is 7.5% per annum. For the purpose of calculating ROCE and gearing, all finance lease obligations are treated s long-term interest bearing borrowings. (iv) The following ratios have been calculated for Padma Ltd. and can be taken to be correct: Return on year end capital employed (ROCE) 14.8% (capital employed taken as shareholders funds plus long-term interest bearing borrowings see note (iii) above) Pre-tax return on equity (ROE) 19.1% Net asset (total assets less current liabilities) turnover 1.2 times Gross profit margin 12.5% Operation profit margin 10.5% Current ratio 1.2:1 Closing inventory holding period 70 days Trade receivables collection period 73 days Trade payables payment period (using cost of sales) 108 days Gearing [see note (iii) above] 35.3% Interest cover 6 times Dividend cover 3.6 times Required: (a) Calculate for Jamuna Ltd. the ratios equivalent to all those given for Padma Ltd. above. (b) Assess the relative performance and financial position of Padma Ltd. and Jamuna Ltd. for the year ended 30 September 2008 to inform the directors of Hosaf Ltd. in their acquisition decision. [Marks: (8+12) = 20]

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Q. No. 4. You have qualified as a CMA and joined in a company named Afnan Ltd. as a Assistant Finance Controller. As per the requirement by the management of the company you were asked for current years position based on following data which is not representing the true position of the company: Afnan Ltd. Statement of Financial Position As on 31.12.2012. Liabilities Amount (Tk.) Share Capital : Authorised 20,000, 10% redeemable preference share of Tk.10 each 200,000 180,000, Ordinary Shares of Tk.10 each 18,00,000 20,00,000 Issued, Subscribed and paid up Capital: 20,000, 10% redeemable preference share of Tk.10 each 200,000 20,000, Ordinary Shares of Tk.10 each 200,000 Reserve and Surplus : General Reserve . 240,000 Securities premium 140,000 Profit and Loss Account....................................... 37,000 Current Liabilities & Provision:.. 23,000 840,000 Assets Fixed Assets : Gross Block .Tk. 600,000 Less : Depreciation 200,000 400,000 Investment . 200,000 Current Assets, Loans & Advances : Inventories . 50,000 Debtors.. 50,000 Cash & Bank balance 100,000 Miscellaneous Expenditure to the extent not written-off

200,000 40,000 840,000

For the year ended 31.12.2012, the company made a net profit of Tk. 30,000 after providing for Tk. 40,000 depreciation and writing off miscellaneous expenditure of Tk. 40,000. The following additional information is available with regard to companys operation. i. The preference dividend for the year ended 31.12.2012 was paid before 31.12.2012. ii. Except cash & balances, other current assets and current liabilities on 31.12.2012, was the same as on 31.12.2011. iii. The company redeemed the preference share at a premium of 10%. iv. The company issued bonus shares in the ratio of 1 share for every two ordinary shares held as on 31.12.2012. v. To meet the cash requirements of redemption, the company sold a portion of the investments, so as to leave a minimum balance of Tk. 60,000 after such redemption. vi. Investments were sold at 90% cost as on 30.12.2012. Required: (i) Necessary Journal entries. (ii) Cash and Bank Account (iii) Statement of Financial Position as on 31.12.2012. [Marks: (6+4+10) = 20]

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Q. No. 5. (a) Monyem Limited reported a Profit Before Tax (PBT) of Tk. 4 Lakhs for the 3rd Quarter ending 30th September 2012. On enquiry you observe the following: (i) Dividend Income of Tk. 4 Lakhs received during the quarter has been recognized to the extent of Tk. 1 Lakh only. (ii) 80% of Sales Promotion Expenses Tk. 15 Lakhs incurred in the 3rd quarter has been deferred to the 4th quarter as the Sales in the last quarter is high. (iii) In the 3rd quarter, Monyem Limited changed depreciation method from WDV to SLM, which resulted in excess depreciation of Tk. 12 Lakhs. The entire amount has been debited in the 3rd quarter, though the share of the 3rd quarter is only Tk. 3 Lakhs. (iv) Tk,2 Lakhs extraordinary gain received in 3rd quarter was allocated equally to the 3rd and 4th quarter. (v) Cumulative loss resulting from change in method of inventory valuation was recognized in the 3rd quarter of Tk. 3 Lakhs. Out of this loss Tk. 1 lakh relates to previous quarters. (vi) Sale of investment in the 1st quarter resulted in a gain of Tk. 20 Lakhs. Monyem Limited had apportioned this equally to the 4 quarters. Prepare the adjusted Profit Before Tax for 3rd quarter of Monyem Limited. (b) Tammana Int. owes Yeasmine Int. Tk. 2,000 on 1st April 2012. From 1st April 2012 to 30st June 2012 the following further transactions took place between Tammana Int. and Yeasmine Int. : April 10 : Tammana Int. buys goods from Yeasmine Int. for Tk. 5,000. May 16 : Tammana Int. receives cash loan of Tk. 10,000 from Yeasmine Int. June 9 : Tammana Int. buys goods from Yeasmine Int. for Tk. 3,000. Tammana Int. pays the whole amount, together with interest @15% per annuam, to Farhana Int. on 30th June 2012. Calculate the interest paid by Tammana Int. on 30th June, 2012 by the average-due-date method. (c) The closing inventory at cost of MMH Ltd. amounted to Tk. 956,700. Shirts 350, which had cost Tk. 380 each and normally sold for Tk. 750 each are included in this amount of Tk. 956,700. Owing to a defect in manufacture, they were all sold after the Balance Sheet date at 50% of their normal price. Selling expenses amounted to 5% of the proceeds. What should be the closing inventory value as per BAS-2? [Marks: (7 +6 +7) = 20] = THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 102. COST ACCOUNTING. Time: Three Hours All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Full Marks:100

Q. No. 1. Haycarb Manufacturing produces two types of entry doors: Deluxe and Standard. The assignment basis for support costs has been direct labor dollars. For 2012, Haycarb compiled the following data for the two products: Deluxe Standard Sales units 50,000 400,000 Sales price per unit Direct material and labor costs per unit Manufacturing support costs per unit $650.00 $180.00 $ 80.00 $475.00 $130.00 $120.00

Last year, Haycarb Manufacturing purchased an expensive robotics system to allow for more decorative door products in the deluxe product line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 2012: Activity Setups Machine-related Packing Cost Driver of setups of machine hours of shipments Cost $ 500,000 $44,000,000 $ 5,000,000 Total 500 600,000 250,000 Deluxe 400 300,000 50,000 Standard 100 300,000 200,000

Required: a. Using the current system, what is the estimated: i. total cost of manufacturing one unit for each type of door? ii. profit per unit for each type of door? b. Using the current system, estimated manufacturing overhead costs per unit are less for the deluxe door ($80 per unit) than the standard door ($120 per unit). What is a likely explanation for this? c. Review the machine-related costs above. What is a likely explanation for machine-related costs being so high? What might explain why total machining hours for the deluxe doors (300,000 hours) are the same as for the standard doors (300,000 hours)? d. Using the activity-based costing data presented above, i. compute the cost-driver rate for each overhead activity. ii. compute the revised manufacturing overhead cost per unit for each type of entry door. iii. compute the revised total cost to manufacture one unit of each type of entry door. e. Is the deluxe door as profitable as the original data estimated? Why or why not? f. What considerations need to be examined when determining a sales mix strategy? [Marks: (4+3+5+6+3+4) = 25]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 102. COST ACCOUNTING. Q. No. 2. (a) Explain the difference between actual costing and normal costing. Describe the benefits of using a predetermined overhead rate instead of an actual overhead rate. (b) BIM Computers sells its popular PC-PAL model to distributors at a price of $1,250 per unit. BIMs profit margin is 20%. Factory orders average 400 units a week. Currently, BIM works in a batch mode and produces a 4-week supply in each batch. BIMs production process involves three stages: PC board assembly (the automatic insertion of parts and the manual loading, wave soldering, and laser bonding of electronic components purchased from outside sources), Final assembly, and Testing. When the firm wants to change production from one model to another, it must shut down its assembly line for half a way. The company estimates that downtime costs one-half hour of supervisory time and an additional $2,000 in lost production and wages paid to workers directly involved in changeover operations. Salaries for supervisory personnel involved amount to $1,500 a day. Although BIM products are generally regarded as high quality, intense price competition in the industry has forced the firm to embark on a cost-cutting and productivity-improvement campaign. In particular, BIM wants to operate with lower inventories but without sacrificing customer service. Releasing some of the funds tired up in outputs inventory would allow BIM to invest in a new product development project that is expected to yield a risk-adjusted return of 20%. Assume 50 workweeks in a year; 5 working days in a week and 8 working hours per day. Required: (i) (ii) Determine BIMs total annual cost of production and inventory control. Compute the economic batch size and the resulting cost savings. [Marks: {5 +(7+8)} = 20] Q. No. 3. (a) What are cost objects, cost pools and allocation bases? What role do they play in cost allocation? What is the difference between cost allocation bases and cost drivers? (b) Kirk Manufacturing Company uses a job order costing system. At the beginning of April, Kirk only had one job in process, Job #898. The job was finished during April by incurring additional direct costs of $350 for materials and $700 for labor. Also during April, Job #899 was started and finished. The direct costs assigned to this job were $1,200 for materials and $950 for labor. Job #900 was started during April but was not finished by the end of the month. The direct costs assigned to this job $820 for materials, and $540 for labor. Kirk applies manufacturing overhead to its products at a rate of 300% of direct labor cost. Kirk's cost of goods manufactured for April was $14,570. Find out the beginning balance of Work-in-Process. [Marks: (10+10) = 20]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 102. COST ACCOUNTING. Q. No. 4. (a) Discuss the accounting treatment of spoilage in a job order system. (b) Austral Furniture manufactures high-quality furniture. During the past year, the companys design department developed a new product, a marble-topped dining table. This would be the first time that Austral would work with marble. The companys existing products were made of timber, sometimes in conjunction with glass. The design department selected a team of experienced tradespersons to manufacture a trial batch of 10 marble-topped tables. A task analysis of the processes used to produce this batch of tables indicated the following direct inputs and average costs per table: Direct material $300 Direct labour $200 The average hourly labour rate for the team of tradespersons was $20 per hour. Required: Assuming an 80 percent learning curve: (i) Estimate how many direct labour hours will be required to produce a second batch of 10 marble-topped dining tables. (ii) What is the direct labour cost per table for this second batch? (iii) Will the last table produced in the second batch take the same amount of direct labour time as did the first table in the batch? Why? (iv) Assume that after completing and selling these first two batches Austral receives an order from a wholesaler for a batch of 60 tables. How many direct labour hours will be required to produce this batch of tables? (v) What is the direct labour cost per table for the order form the wholesaler? [Marks: 5+(3+3+3+3+3) = 20] Q. No. 5. The fixed costs of operating the maintenance facility of General Hospital are $4,500,000 annually. Variable costs are incurred at the rate of $30 per maintenance-hour. The facility averages 40,000 maintenance-hours a year. Budgeted and actual hours per user for 20X3 are as follows: Actual hours Budgeted hours Building and grounds 10,000 12,000 Operating and emergency 8,000 8,000 Patient care 21,000 22,000 Administration 1,000 1,200 Total 40,000 43,200 Assume that budgeted maintenance-hours are used to calculate the allocation rates. Required a. If a single-rate cost-allocation method is used, what amount of maintenance cost will be budgeted for each department? b. If a single-rate cost-allocation method is used, what amount of maintenance cost will be allocated to each department based on actual usage? Based on budgeted usage? c. If a dual-rate cost-allocation method is used, what amount of maintenance cost will be budgeted for each department? d. If a dual-rate cost-allocation method is used, what amount of maintenance cost will be allocated to each department based on actual usage? Based on budgeted usage for fixed operating costs and actual usage for variable operating costs? [Marks: (3+3+4+5) = 15]] = THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 103.MANAGEMENT AND MARKETING MANAGEMENT. Time: Three Hours Answer any THREE questions from each part Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. PART - A : MANAGEMENT (TOTAL MARKS:50) Q.No.1 (a) Discuss the four basic activities that comprise the management process. How are they connected with each other? (b) Analyze the basic managerial roles and skills. (c ) Discuss the classification of managers: Theory X and Theory Y. [Marks: (5+5+6) = 16] Q. No. 2. (a) Decision making is the catalyst that drives the planning process which do you think easier for a top manager (i) making a decision or (ii) developing a plan? Explain in favour of your answer. (b) Highlight the fundamental and rational perspective of decision making. (c) Summarize the comparative advantage and disadvantage of group decision making. [Marks: (5+6+5) = 16] Q. No. 3. (a) Discuss strategic planning. (b) Discuss the difference between strategic planning and annual planning? (c ) Who are the strategic managers of a company? Discuss. [Marks: (5+5+6) = 16] Q. No. 4. (a) Define personality and describe personality attributes that affect behavior in organization. (b) Appropriate leader behavior varies from one situation to another What are the three major factors that influence the leadership behavior to change? Give a brief. (c) Summarize the need hierarchy approaches to employee motivation. [Marks: (5+5+6) = 16] Q. No. 5. (a) Discuss the seven traits associated with leadership. (b) Explain the Fiedlers contingency model of leadership. (c) What are the sources of authority? [Marks: (5+6+5) = 16] * Two Marks are reserved for neatness and relevance. Full Marks : 100

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 103.MANAGEMENT AND MARKETING MANAGEMENT. PART- B: MARKETING MANAGEMENT (TOTAL MARKS :50)

Q. No. 6. (a) Define Need, Want and Demand in Marketing. (b) Define customer value and satisfaction. How can a company deliver them? (c) What is a marketing plan and what does it contain? Give a brief on it as a part of your product planning process. [Marks: (3+5+8) = 16] Q. No. 7. (a) Discuss briefly the selling concept. (b) Why does a business advertize? ( c) Discuss the different methods of Sales Promotion [Marks: (5+5+6) = 16] Q. No. 8. (a) What is marketing research? What are the steps of an effective marketing research process? (b) Define Marketing Information System (MIS). What are the three major tools an effective MIS relies on? (c) How can you organize your internal records to develop a strong MIS? [Marks: (6+5+5) = 16] Q. No. 9. (a) Define SBU. Discuss the BCG matrix for evaluating the current business portfolio. (b) Discuss Ansoffs Product Market Expansion Grid and different forms of diversification. [Marks: (8+8) = 16] Q. No. 10. (a) Explain how companies find and develop new-product ideas. Which is the best source of new product ideas? (b) What major commercialization plan elements must marketer address before launching a new product? (c) Differentiate between market penetration and market skimming pricing strategy for a new product. [Marks: (6+5+5) = 16] * Two Marks are reserved for neatness and relevance.

= THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013 EXAMINATION PROFESSIONAL LEVEL-I SUBJECT: 104. INFORMATION TECHNOLOGY Time : 2 hours 30 minutes Answer any FOUR of the following questions. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Full Marks: 80

Q. No. 1. a) What is Software? Discuss the classifications of software. b) Define Executive Support Systems (ESS). Write down the major components of ESS. c) Explain the benefit and limitations of Expert Support System (ESS). [Marks: (7+6+7) = 20] Q. No. 2. a) Why student of CMA should study information system? b) Discuss briefly about major types of information systems in organization. c) Describe the role of CIO in a company. d) Write down the main features of fourth generation language? [Marks: (5+5+5+ 5) = 20] Q. No. 3. a) What is data modeling? What is its purpose? Briefly describe three commonly used data models. b) What is the difference between a data definition language (DDL) and a data manipulation language (DML)? c) What is a hypermedia database? How does it differ from a traditional database? How is it used for the web? [Marks: (7+5+8 = 20] Q. No. 4. a) What are controls? Distinguish between general controls and application controls. b) What is security? How to develop a disaster recovery plan? c) Why are digital signatures and digital certificates important for electronic commerce? d) What are the sources of viruses and how it spread? How can you protect your computer from viruses? [Marks: (5+5+5+5) = 20] Q. No. 5. a) What infrastructures are required to support E-Commerce and M-Commerce? b) What do you mean by Disaster Recovery Plan? c) Define computer crimes with two examples? [Marks: (8+6+6) = 20] Q. No. 6. a) What is DBMS? What are the major components of DBMS? b) Discuss the features of DBMS. c) What is data Validation? d) In the information systems, why do we need to validate data? Mention some methods of data validation. [Marks: (5+4+3+8) = 20] = THE END = Page 1 of 1

THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I Time: Three Hours Full Marks:100 All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Q. No. 1. (a) As per IAS-31, what do you mean by Jointly Controlled Operations? (b) Vijay and Arun entered into a joint venture for purchase and sale of cotton. They agreed to share profits in the proportion of 2:1 and also to be entitled to an interest of 12% per annum (on monthly basis) on moneys invested as well as received. The following transactions took place in between themselves: i) On 1st January 2012, Vijay purchased 1,000 bales of cotton @ Tk.500 per bale, the brokerage being Tk.10 per bale. ii) On 1st February 2012, Arun purchased 500 bales of cotton @ Tk.520 per bale, the brokerage being Tk.10 per bale. iii) On 29th February 2012, Vijay sold 800 bales of cotton @ Tk.572 per bale, the brokerage being Tk.12 per bale and took the proceeds to himself. iv) On 1st April 2012, Arun sold 600 bales of cotton @ Tk.580 per bale, the brokerage being Tk.10 per bale and took the proceeds to himself. It was also agreed that each co-venture will at first sell from his own purchase and then, if need be, from the goods purchased by other co-venture. The balance stock left unsold was taken by Vijay at cost on 30th April, 2012 when accounts were settled between the co-venture. Required: Prepare the Accounts of co-ventures and the joint venture Account as would appear when maintained in separate set of books. [Marks: (5+15)=20] Q No.2. (a) Write down the Licensing of financial institutions as per the Financial Institutions Act, 1993 (b) Lab Aid company and Prime Finance and Investment Ltd. sign a lease agreement On 1 January 2013 that calls for Prime Finance to lease equipment to Lab Aid beginning January 2013. The terms and provisions of the lease agreement and other information are as follows: The term of the lease is five years and the lease agreement is non cancellable, requiring equal rental payments of 24,33,139.00 at the beginning of each year The equipment has a fair value at the inception of the lease is 1,00,00,000.00 . It has an estimated economic life of 5 years without any residual value. Lessee company pays all of the executor costs directly to third parities except for the property taxes of Tk 35,000.00 per annum, which is included in the annual payments to the lessor. The lease contains no renewal option and the equipment have to hand over to the lessor after the lease period. The lessee company incremental borrowing rate is 11% but the lessor company set the annual rental to earn a rate of return on its investment @ 10% ,This fact is known to the lessee company. The lessee company charges depreciation on its similar types of equipments under straight line method.

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I Q. No. 2. (contd.) Required: (i) Calculate the present value of the leased equipment. (ii) Journalize the transaction in the books of Accounts of Lab AID company for the year 2013 and 2014 assuming the company follows calendar year. (iii) Prepare a lease amortization Table. [Marks: (4+5+6+5) = 20] Q. No. 3. (a) What are the provisions with regard to Loan Loss Provision and Interest Suspense of a banking company as per IAS/BAS-30? (b) From the following details of Western Bank Ltd prepare Profit and Loss Account for the year ended 31st December, 2012: Taka Interest paid on Deposits, Borrowings etc. 1,30,00,000 Interest and Discount Income 3,10,00,000 Rent Received 1,20,000 Net profit on sale of Investments 1,000 Salaries, Allowances and Provident Fund 1,25,00,000 Commission, Exchange and Brokerage 18,00,000 Law charges 20,000 Rent & Taxes 3,00,000 Postage and Telegrams 1,10,000 Auditors Fees 50,000 Directors Fees 25,000 Printing and Stationery 2,20,000 Depreciation on Property 1,90,000 Miscellaneous Receipts 85,000 Miscellaneous Expenditure 2,60,000 Repairs to Property 40,000 Telephone and Stamps 1,50,000 Advertisement 35,000 Bad Debts 50,000 Insurance and Lighting 2,00,000 The Chairman is paid salary @Tk.4,000 p.m. and allowances at Tk.1,000 per month. 8% is contributed to Provident Fund on the basis of basic salary. No sitting fees nor any bonus has been paid to him. Perquisite for free quarters and motor car is valued at Tk.6,000. Opening balances of Unexpired Discount, Reserve for Bad Debts and Reserve for taxation were Tk.10,00,000, Tk.6,00,000 and Tk.30,00,000 respectively. Closing balance required in Unexpired Discount Account and Bad Debts Reserve Account are Tk.8,60,000 and Tk.7,50,000 respectively. Tk.25,00,000. Income Tax has been adjusted against Advance Payment of tax amounting to Tk.30,00,000 and Tk.35,00,000 provision at the end of the year is required. [Marks: (10+10) = 20]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I Q .No.4. (a) Distinguish between an Appropriation, an encumbrance and an expenditure. (b) The Trial balance for the General fund of Khulna City Corporation as of December 31, 2011 is presented below: Khulna City Corporation The General Fund Trial Balance December 31, 2011 Accounts Title Debit Credit Tk. Tk Cash 8,30,000 45,000 Property Tax Receivable 20,000 Estimated uncollectible Taxes 50,000 Due From Trust Fund 4,60,000 Vouchers Payable 30,000 Reserve for encumbrances 4,15,000 Unreserved Fund Balance 9,25,000, 9,25,000 Transactions for the year ended December 31, 2012, are summarized as follows: 1. The city council adopted a budget for the year with estimated revenue of Tk. 7,35,000 and appropriation of 7,00,000. 2. Property Taxes in the amount of Tk. 5,90,000 were levied for the current year . It is estimated that Tk. 24,000 of the taxes levied will prove to be uncollectible. 3. Proceeds from the sale of equipment in the amount of Tk. 35,000 were received by the General fund. 4. License and fees in the amount of Tk. 1,10,000 were collected. 5. The total amount of encumbrances against fund resources for the year was Tk. 6,42,500. 6. An invoice in the amount of Tk. 28,000 was received for goods ordered in 2012. The invoice was approved for payment. 7. Property taxes amounted Tk. 5,70,000 were collected. 8. Vouchers in the amount of Tk. 4,75,000 were paid. 9. Tk. 50,000 was transferred to the general fund from the trust fund. 10. The Khulna City council authorized the write off of Tk. 30,000 in uncollectible property taxes. Required: (i) Prepare Journal entries to record the transactions for the year ended December 31, 2012. (ii) Prepare pre closing trial balance for the general fund as of December 31,2012. (iii) Prepare necessary closing entries for the year ended December 31, 2012. (iv) Prepare a Balance sheet as at December 31, 2012 [Marks: (7+5+2+2+4) = 20]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I Q. No. 5. ABC sells goods to the building industry and carries out construction contracts for clients. ABCs Trial balance at 30 September 2011 is shown below: Notes Tk.000 Tk. 000 Administrative expenses 1,020 Cash and cash equivalents 440 Cash received on account from construction contract clients during year to 30 September 2011 contract 1 4,000 (i) Cash received on account from construction contract clients during year to 30 September 2011 contract 2 1,800 (i) Cash received on disposal of plant and equipment 15 (iii) Construction contract 1 - work in progress for year to 30 September 2011 3,750 (i) Construction contract 2 - work in progress for year to 30 September 2011 2,250 (i) Distribution costs 590 Equity dividend paid 250 (viii) Equity Shares $1 each, fully paid at 30 September 2011 2,500 Income tax 15 (v) Interest paid half year to 31 March 2011 58 Inventory at 30 September 2011 (excluding construction contracts) 310 Long term borrowings (redeemable 2021) 2,300 (iv) Plant and equipment at cost 30 September 2011 4,930 (iii) Property at valuation 30 September 2010 11,000 (ii) Provision for deferred tax at 30 September 2010 250 (vi) Provision for plant and equipment depreciation at 30 September 2010 2,156 (iii) Provision for property depreciation at 30 September 2010 3,750 (ii) Cost of goods sold (excluding construction contracts) 3210 Retained earnings at 30 September 2010 Sales revenue Share premium at 30 September 2011 Trade payables Trade Receivables 627 9,500 1,500 235 (vii) 810

28,633 28,633 Additional information provided: (i) At 30 September 2011 ABC had two construction contracts in progress. Contract 1 Contract 2 Contract length 3 years 2 years Date commenced 1 October 2010 1 April 2011 Fixed contract value TK. 11,000,000 Tk. 8,000,000

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I Q. No. 5. (contd.) Contract detail for year ended 30 September 2011 Contract 2 Contract 1 Proportion of work certified as completed 40% 25% Tk. 000 Tk. 000 Construction contract work in progress 3,750 2,250 Estimated cost to complete contract 5,400 6,750 Cash received on account from construction Contract clients during year 4,000 1,800 Both contracts use the value of work completed method to recognize attributable profit for the year. Property consists of land Tk.3,500,000 and buildings Tk.7,500,000. Buildings are depreciated at 5% per year on the straight line basis. No buildings were fully depreciated at 30 September 2011. Plant and equipment is depreciated at 25% per year using the reducing balance method. During the year to 30 September 2011 ABC sold obsolete plant for Tk.15,000. The plant had cost Tk.75,000 and had been depreciated by Tk.65,000. All depreciation is considered to be part of cost of sales. ABCs policy is to charge a full years depreciation in the year of acquisition and no depreciation in the year of disposal.

(ii) (iii)

The long term borrowings incur annual interest at 5% paid six monthly in arrears. The income tax balance in the trial balance is a result of the under provision of tax for the year ended 30 September 2010. The directors estimate the income tax charge on the profit of the year to 30 September 2011 at Tk.910,000. (vi) The deferred tax provision is to be increased by Tk.19,000. (vii) On 1 August 2011, ABC was informed that one of its customers, EF, had ceased trading. The liquidators advised ABC that it was very unlikely to receive payment of any of the Tk.25,000 due from EF at 30 September 2011. (viii) ABC made no new share issues during the year. ABC paid a final dividend for the year to 30 September 2010. Prepare: ABCs statement of comprehensive income and statement of changes in equity for the year to 30 September 2011 and a statement of financial position at that date in accordance with the requirements of International Financial Reporting Standards. [Marks: (8+7+5) = 20] = THE END =

(iv) (v)

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 202. MANAGEMENT ACCOUNTING. Time: Three Hours All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Full Marks:100

Q. No. 1. (a) Describe the various denominator levels that can be used with an absorption costing system. Also explain why the choice of an appropriate denominator is important. (b) The following data have been extracted from the budgets and standard costs of ABC Limited, a company which manufactures and sells a single product. Per unit Tk. Selling Price 45.00 Direct material cost 10.00 Direct wages cost 4.00 Variable overhead cost 2.50 Fixed production overhead cost are budgeted at Tk.400,000 per annum. Normal production levels are thought to be 320,000 units per annum. Budgeted selling and distribution cost are as follows: Variable Tk.1.50 per unit sold Fixed Tk. 80,000 per annum Budgeted administration cost are Tk. 120,000 per annum. The following pattern of sales and production is expected during the first six months of the year: January-March April-June Sales (units) 60,000 90,000 Production (units) 70,000 100,000 There is to be stock on 1 January. You are required (i) to prepare profit statements for each of the two quarters, in a column format using Marginal costing, and Absorption costing; (ii) to reconcile the profits reported for the quarter January-March in your answer to (a) above. [Marks: 5+(8+8)+4 = 25] Q. No. 2. A private hospital is organised into separate medical units which offer specialised nursing care (e.g. maturity unit, paediatric unit). Figures for the paediatric unit for the year to 31 June 2011 have just become available. For the year in question the paediatric unit charged patients Tk.2,000 per patient day for nursing care and Tk.44 million in revenue was earned. Cost of running the unit consists of variable costs, direct staffing costs and allocated fixed costs. The charges for variable costs such as catering and laundry are based on the number of patient days spent in hospital. Staffing costs are established from the personnel requirements applicable to particular levels of patient days. Charges for fixed costs such as security, administrations etc. are based on bed capacity, currently 80 beds.

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 202. MANAGEMENT ACCOUNTING. Q. No. 2. (contd..) The number of beds available to be occupied is regarded as bed capacity and this is agreed and held constant for the whole year. There was an agreement that a bed capacity of 80 beds would apply to the paediatric unit for the 365 days of the year to 31 June 2011. The table below shows the variable, staffing and fixed cost applicable to the paediatric unit for the year to 31 June 2011. Variable costs (based on patients days)Tk. Catering 4,050,000 Laundry 1,500,000 Pharmacy 5,000.000 11,100,000 Staffing costs Each speciality recruits its own nurses, supervisors and assistants. The staffing requirements for the paediatric unit are based on the actual patient days, see the following table: Patients Days per annum Supervisors Nurses Assistants Up to 20,500 4 10 20 20,500 to 23,000 4 13 24 Over 23,000 4 15 28 The annual costs of employment are: supervisors Tk.220,000 each, nurses Tk.160,000 each and assistants Tk.120,000 each. Fixed costs (based on bed capacity) Tk. Administration 8,500,000 Security 800,000 Rent and property 7,200,000 During the year to 31 June 2011 the paediatric unit operated a 100% occupancy (i.e. all 80 beds occupied) for 100 days of the year. In fact, the demand on these days was for at least 20 beds more. As a consequence of this, in the budget for the following year to 31 June 2012, an increase in the bed capacity has been agreed. 20 extra beds will be contracted for the whole of the year. It is assumed that the 100 beds will be fully occupied for 100 days, rather than being restricted to 80 beds on those days. An increase of 10% in employment costs for the year to 31 June 2012, due to wage rate rises, will occur for all personnel. The revenue per patient day, all other cost factors and the reaming occupancy will be the same as the year to 31 June 2011. Required: (a) Determine, for the year to 31 June 2011, the actual number of patient-days, the bed occupancy percentage, the net profit/loss and the break-even numbers(s) of the patient days for the paediatric unit. (b) Determine the budget for the year to 31 June 2012 showing the revised number of patient-days required to achieve the same profit/loss as computed in (a) above. (c) The margin of safety of a certain level of sales of a company is 40%. The profit is Tk.100,000. The management wants to increase sales by 15%. What will be the expected profit after the increase of sales? Show the relationship between margin of safety and degree of operating leverage. [Marks: (8+8+4) = 20]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 202. MANAGEMENT ACCOUNTING. Q. No. 3. (a) Why do conventional management accounting systems pay so much attention to manufacturing costs? Do you think this is appropriate in to-days business environment? (b) Describe each activity of the value chain and explain why information about costs in the various activities of the various activities of the value chain can be useful to managers. [Marks: (5+10) = 15] Q. No. 4. Sommers Ltd, a variety of industrial valves and pipe fittings that are sold to customers. Currently, the company is operating at about 70 percent of capacity and is earning a satisfactory return on investment. Management have been approached by Glasgow Industries Ltd of Scotland with an offer to buy 120,000 units of pressure value. Glasgow Industries manufactures a valve that is almost identical to the pressure value produced by Sommers; however, a fire in Glasgow Industries valve plant has shut down its manufacturing operations. Glasgow needs the 120,000 valves over the next four months to meet commitments to its regular customers. Glasgow is prepared to pay $19 each for the valves. The cost of the pressure valve produced by Sommers, which is based on current attainable standards, is $20, calculated as follows: Direct material Direct Labour Manufacturing overhead Product cost $5.00 6.00 9.00 $20.00

Manufacturing overhead is applied to production at the rate of $18 per standard direct labour hour. This overhead rate is made up of the following components: Variable manufacturing overhead $6.00 Fixed manufacturing overhead (traceable) 8.00 Fixed manufacturing overhead (allocated) 4.00 Applied manufacturing overhead rate $18.00 Additional cost incurred in connection with sales of the pressure valve includes sales commissions of 5 percent of sales, and freight expense of $1 per unit. However, the company does not pay sales commissions on special orders that come directly to management. In determining selling prices, Sommers adds a 40 percent mark-up to total product cost. This provides a $28 suggested selling price for the pressure valve. The Marketing Department, however, has set the current selling price at $27 in order to maintain market share. Production management believe that they can handle the Glasgow Industries order without disrupting the departments scheduled production. The order would, however, require additional fixed factory overhead of $12 000 per month in the form of supervision and clerical costs. If management accept the order, 30 000 pressure valves will be manufactured and shipped to Glasgow Industries each month for the next four months. Glasgows management have agreed to pay the shipping charges for the valve. Required: a. Determine how many direct labour hours would be required each month to fill the Glasgow Industries order. b. Prepare an analysis showing the impact of accepting the Glasgow Industries order. c. Calculate the minimum unit price that management at Sommers could accept for the Glasgow Industries order without reducing net profit. d. Identify the factors, other than price, that Sommers Ltd should consider before accepting the Glasgow Industries over. [Marks: (3+8+4+5) = 20]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 202. MANAGEMENT ACCOUNTING. Q. No. 5. NazAsh Pvt. Ltd. has had great difficulty in controlling manufacturing overhead costs. At a recent convention, the Managing Director heard about a control device for overhead costs known as a flexible budget, and he has hired you to implement the budgeting program in NazAsh Company. After some effort, you have developed the following cost formulas for the companys Machining Department. These costs are base on a normal operating range of 10,000 to 20,000 machine-hours per month: Overhead Cost Utilities -----------------Lubricants -------------Machine setup --------Indirect labor ---------Depreciation ----------Cost Formula Tk 0.70 per machine-hour Tk 1.00 per machine-hour plus Tk 8,000 per month Tk 0.20 per machine-hour Tk 0.60 per machine-hour plus Tk 120,000 per month Tk 32,000 per month

During March 2013, the first month after your preparation of the above data, the Machining Department worked 18,000 machine-hours and produced 9,000 units of product. The actual manufacturing overhead costs of this production were as follows: Items Utilities ---------------------------------Lubricants ------------------------------Machine setup -------------------------Indirect labor --------------------------Depreciation ---------------------------Total manufacturing overhead costs Taka 12,000 24,500 4,800 132,500 32,000 205,800

Fixed costs had no budget variances. The department had originally been budgeted to works 20,000 machine-hours during March 2013. Required: i. Prepare a flexible budget for the Machining Department in increments of 5,000 hours. Include both variable and fixed costs in your budget. ii. Prepare an overhead performance report for the Machining Department for the month of March 2013. Include both variable and fixed costs in the report (in separate sections). Show only a spending variance on the report. iii. What additional information would you need to compute an overhead efficiency variance for the department? [Marks: (7+10+3)=20] = THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 203. COMMERCIAL & INDUSTRIAL LAWS Time: Three Hours Full Marks: 100 Answer SIX questions taking any THREE from each Part including compulsory question No. 5 and 10. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet

GROUP- A: COMMERCIAL LAWS Q. No. 1. (a) All Contracts are Agreement but all Agreements are not Contract Discuss with a suitable example. (b) Who is a minor? In which cases a person continues to be a minor until he completes the age of 21 years. [Marks: (8+7) = 15] Q. No. 2. (a) Describe circumstances where contract may be enforceable even though they are illegal in some respect. (b) Explain with example how an offer is made? [Marks: (8+7) = 15] Q. No. 3. (a) What type of tests would you apply to determine whether the agency relationship exists or not between two parties? (b) Differentiate between sub-Agent and Co-Agent. [Marks: (8+7) = 15] Q. No. 4. (a) What are the essential features of Negotiable Instruments? (b) Discuss the circumstances where dishonor of cheque for insufficiency of funds in the account is not an offence. [Marks: (8+7) = 15] Q. No. 5. Write short notes on any 04(four) of the following: (a) Coercion; (b) Estoppel; (c) Allonge; (d) Contract of Affreightment; (e) Error of law; (f) Copy Right Act-2000. [Marks: (4 x 5) = 20]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 203. COMMERCIAL & INDUSTRIAL LAWS GROUP B : INDUSTRIAL LAWS

Q. No. 6. Define the following as per the Bangladesh Labour Act 2006(a) Manufacturing process; (b) Commercial Establishment; (c) Casual worker and Badli worker. [Marks: (3 x 5) = 15] Q. No. 7. (a) What are the conditions of employment as per the Bangladesh Labour Act 2006? (b) Who is an adolescent? Discuss the rule of employment of adolescent on dangerous machines. [Marks: (8+7) = 15] Q. No. 8. (a) Discuss the liability of a Garments Owner in respect of providing drinking water and facilities of latrines & urinals in his factory as per the BLA 2006. (b) Discuss unfair labor practices on the part of the workmen. [Marks: (10+5) = 15] Q. No. 9. (a) What are the deductions which may be made from wages? (b) Discuss the right to and liability for payment of maternity benefit. [Marks: (10+5) = 15] Q. No. 10. Write short notes of any 04(four) of the following: (a) Go-slow; (b) Service book; (c) Disputes as to age; (d) Sick-leave; (e) Arbitration; (f) Partial disablement; (g) Emergency Exit. [Marks: (4 x 5) = 20] = THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 204. TAXATION. Time: Three Hours Full Marks : 100 All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Q. No. 1. (a) Briefly explain the income tax provisions applicable in following cases:(i) Private Power Generation Company; (ii) Private Medical College; and (iii) Chamber of Commerce and Industry. (b) M/S. ABC Ltd. is a Public Limited Industrial Company and its shares are regularly traded in Stock Exchanges in Bangladesh. Its total income has been assessed to Tk. 25,50,000 for the assessment year 2012-2013. The above total income includes Dividend Income of Tk. 1,00,000 and Capital Gain of Tk. 1,50,000. The company declared and paid 25% cash dividend to its shareholders. Required: Calculate the tax liability of the company. [Marks: {(3 x 3) +6} = 15] Q. No. 2 (a) The following particulars of Mr. Ali Ahmed are available for the assessment year 20122013:(i) Income from house property Tk. 10,00,000/(ii) Business income (after allowing current years Depreciation of the Tk.. 2,00,000/-) Tk. 7,00,000/The following losses have been brought forward from the preceding year: (i) Unabsorbed depreciation Tk. 8,00,000/(ii) Business loss Tk. 5,00,000/The DCT is proposing to assess him on a total income of Tk. 10,00,000/- by setting off only of the business loss of Tk. 5,00,000/- and part of the unabsorbed depreciation of Tk. 2,00,000/- against the business income of Tk. 7,00,000/-. Is he right in his action? (b) What are the losses that cannot be carried forward? [Marks: (5+3) = 8] Q. No. 3 (a) Explain the types of depreciation allowances allowed under the Income Tax Ordinance, 1984. How do they differ from accounting depreciation? What is unabsorbed depreciation and how it can be carried forwarded? (b) What is the procedure to apply for tax holiday? What are the documents to be attached with such application? (c) Explain settled tax liability scheme on certain incomes u/s 82C. Also mention income/receipt where taxes are deducted/collected at source under settled liability scheme. When is extra tax payable u/s 82C? (d) Can the Taxes Appellate Tribunal pass an order exparte for non-appearance of the appellant on the date of hearing? Differentiate between the question of fact and the question of law. [Marks: (5 X 4) = 20]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 204. TAXATION. Q. No. 4 (a) Mr. X an employee of a limited company, received the following salaries and allowances during the income year ended 30 June, 2012. Particulars Taka 1. Basic salary 4,20,000/2. House rent allowance 2.00.000/3. Festival bonus equal to two months basic salary 70,000/4. Leave encashment salary 35,000/5. Conveyance allowance 24,000/6. Contribution to recognized provident fund @ 8% 33,600/7. Servant wages 24,000/8. Children education allowance 60,000/9. Leave fare assistance 50,000/10. Bungalow utilities 25,000/Compute excess perquisite as per section 30 (e) for the assessment year 2012-2013. (b) How a foreigner being resident in Bangladesh will get foreign tax credit on the income earned at their own country? [Marks: (10+2) = 12] Q. No. 5. Mrs. Ferdous Ara FCMA is a retired Government Officer. Currently she works as advisor of XYZ Ltd. and ABC Ltd. Both are private limited companies in Bangladesh. She also works as a part time consultant of UNDP and World Bank. During the twelve months ended 30 June 2012 she received the following income: (a) From XYZ Ltd. Basic salary Tk. 20,000/- = p.m. House rent allowance Tk. 11,200/- = p.m. Medical allowance Tk. 2,000/- = p.m. Conveyance allowance Tk. 1,000/- = p.m. (b) From ABC Ltd. Basic salary Tk. 20,000/- = p.m. House rent allowance Tk. 9,000/- = p.m. Medical allowance Tk. 2,000/- = p.m. Conveyance allowance Tk. 1,000/- = p.m. Performance bonus Tk. 40,000/- = p.m. No car was provided by any company. (c) Consultancy fees of Tk. 4,00,000/- in total from UNDP for her work in Bangladesh and Tk. 3,00,000/-(in equivalent US dollar) from World Bank for her work in Bhutan and Nepal. (d) Rental income @ Tk. 25,000 p.m. from an apartment owned by her. It is used by a foreigner as his residence. She paid municipal tax of Tk. 40,000/-, land revenue of Tk. 2,000/- and a fire insurance premium of Tk. 15,000/- during the year. The apartment remained vacant for 2 months during the year. (e) Dividend of Tk. 50,000/- received from investment in shares of a number of listed companies. (f) She made a capital gain of Tk. 2,00,000/- by buying and selling listed companies shares during the year. (g) She earned interest of Tk. 15,000/- from post office savings bank account.

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-II SUBJECT: 204. TAXATION. Q. No. 5. (contd..) (h) She entered into a contract with a developer on 1/11/11 for erecting a six storied building with 10 flats out of which she will get 5 flats free of cost. In addition, she will be given Tk. 60,00,000/- in cash to be paid in 3 equal installments of Tk. 20,00,000/- each in November, 2011, 2012 and 2013. She received Tk. 20,00,000/- in November 2011. (i) She had an apartment which was sold for Tk. 1 Crore (which was same as the Mouza value) on 1 August 2011. The buyer paid all the costs (including capital gain tax, stamp duty, registration cost etc.) at the time of registration in August 2011. The apartment was bought by her on 1 August 2004 at a cost of Tk.40 lac. (j) Mrs. Ferdous Ara is a lecturer at the ICMAB evening coaching class and is also involved in the ICMAB examination process. She is also a regular contributor of articles to the ICMAB Journal and newspapers. From these sources she received the following additional income during the year: Taka Lecture honourarium 60,000/Payments for articles published 25,000/Questions setting and scripts examination fees 12,000/She paid Tk. 3,000/- to a part-time typist for typing manuscripts of her articles. (k) She received Tk. 25,000/- from agricultural land by selling crops. (l) She received honorarium of Tk.50,000/- during the year as a Board Director of Rupali Bank Ltd. (m) Other information are as follows: Mrs. Ferdous Ara has taken a life insurance policy in favour of her son and has paid quarterly premium of Tk. 5,000/- each throughout the year. She spent Tk. 10,000/- on professional and technical books and publications during the year. She paid an annual subscription of Tk. 4,800/- to ICMAB on 1/7/11. She owns and maintains a motor car. She sold the shares of a listed company for Tk. 2,00,000/- which she bought for Tk. 1,50,000/- in the income year 2010-2011, and for which she claimed and received the allowable tax rebate for the investment. She has again bought shares of 3 other listed companies during the year for Tk. 6,00,000/ Mrs. Ferdous Ara declared more than 20% income in comparison to previous assessment year. Required: Compute the total income and tax liability of Mrs. Ferdous Ara for the assessment year 2012-2013, advising whether she should submit the return under Universal Self Assessment Scheme or under normal procedure. [Marks: 30] Q. No. 6. (a) What are the rates of gift tax in Bangladesh? What is the rationale of imposition of gift tax? (b) Distinguish among Credit, Drawback and Refund as per the VAT Act, 1991. (c) Mention five situations where Input Tax Credit is not allowed as per related section of the VAT Act, 1991. (d) Discuss in brief about timing and modes of payment of the Value Added Tax. [Marks: (3+4+4+4) = 15] = THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II. Time: Three Hours Full Marks:100 All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Q. No. 1. (a) What is business combination? What are the types of business combinations? Explain briefly each of the types of combinations. (b) Autumn Ltd acquired 100% of Spring Ltd on 1 January 2011 when fair value of Spring Ltds identifiable assets net of liabilities assumed was Tk.20,000,000. The consideration was: 8 million shares in Autumn Ltd issued on 1 January 2011 when market price of Autumn Ltds shares was Tk.3.5. A further payment of cash on 31 December 2012: Tk.700,000 if Spring Ltds profits for the year ended 31 December 2012 were no less than Tk.2 million. Tk.1,750,000 if Spring Ltds profits for the year ended 31 December 2012 were no less than Tk.3 million. At 1 January 2011 the fair value of contingent consideration was Tk.100,000. At 31 December 2011 the fair value of the contingent consideration was Tk.1,200,000. A discount rate of 10% was used in measuring these fair values. At 31 December 2012 Spring Ltds 2012 profits per draft financial statements were 3.5 million. Required: Show calculations of the amounts to be recognized in the statements of financial position and in profit or loss for the years ended 31 December 2011 and 2012. [Marks: (5+10) = 15] Q. No. 2. Z & Co. purchased ordinary shares of P & Co. in the following sequence: Date of purchase No. of shares purchased Amount paid January 1, 2007 1,000 shares Tk. 25,000 January 1, 2009 500 shares Tk. 13,000 January 1, 2010 2,000 shares Tk. 58,000 Z & Co. initially recorded its investment in equity securities of P & Co. under the cost method. But the purchase of shares of Z & Co. on January 1, 2010, gave Z & Co. the ability to exercise significant influence over the P & Co. in their decision making process. Z & Co., therefore, decided to switch over to the equity method in recording its investment in shares of P & Co. retroactively from the date of the initial investment. The book value of P & Co.s net assets at January 1, 2007, was Tk. 200,000. P & Co.s reported net income and dividend paid since Z & Co. first purchased shares of P & Co. were as follows: 2007 40,000 20,000 2008 60,000 20,000 2009 40,000 10,000 2010 50,000 20,000

Net income (Tk.) Dividend paid (Tk.)

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Q. No. 2 (Contd) The amount paid in excess of the book value of P & Co.s net assets was attributed to the increase in the value of identifiable intangible assets with a remaining life of five years at the date the shares of P & Co. were purchased. P & Co. has had 10,000 ordinary shares outstanding throughout the four-year period. Required: (a) Calculate book value of P & Co.s net assets on each of the dates, Z & Co. acquired their equity securities. (b) Calculate excess of acquisition costs of Z & Co. over book values of securities of P & Co. on each acquisition date. (c) Re-calculate income on investment in P & Co.s shares under equity method in books of Z & Co. (d) Give the journal entries recorded on Z & Co.s books in 2010 related to its investment in P & Co.s shares. [Marks: (4 x 5) = 20] Q. No. 3. On January 1, 2011, H & Co. purchased 80 percent of S & Co.s ordinary shares for Tk. 34,600. The trial balances for the two companies on December 31, 2012 were as follows: H & Co. S & Co. Items Dr.(Tk.) Cr.(Tk.) Dr.(Tk.) Cr.(Tk.) Cash 11,800 6,200 Accounts Receivable 16,600 14,200 Inventory 55,000 23,600 Land 16,000 6,000 Buildings & Equipment 100,000 30,000 Investment in S & Co.s 43,000 ordinary shares Cost of Goods Sold 98,000 62,000 Depreciation Expense 5,000 3,000 Other Expenses 12,400 20,000 Dividends Declared 9,000 5,000 Accumulated Depreciation 36,000 18,000 Accounts Payable 17,200 6,000 Mortgage Payable 40,000 14,000 Ordinary Shares 60,000 10,000 Retained Earnings, 77,000 28,000 January 1, 2012 Sales 130,000 94,000 Income from Subsidiary 6,600 366,800 366,800 170,000 170,000 (1) On January 1, 2011, S & Co. reported net assets with a book value of Tk. 30,000. A total of Tk. 4,000 of the purchase price is applied to goodwill. At December 31, 2012. H & Co. management reviewed the amount attributed to goodwill and concluded that goodwill was impaired and should be reduced to Tk. 1,200. (2) S & Co.s depreciable assets had a estimated economic life of 11 years on the date of combination. The difference between fair value and book value of tangible assets is related entirely to depreciable assets. (3) H & Co. used the equity method in accounting for its investment in Subsidiary company.

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(4)

Detailed analysis of receivables and payables showed that S & Co. owed to H & Co. Tk. 1,800 on December 31, 2012.

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Q. No. 3 (Contd) An analysis of inventory of showed that beginning inventory of S & Co. included an amount of Tk. 10,000 which was sold in the year 2012; there was no such unsold inventory purchased from holding company. (6) An analysis of purchase and sales should that during the year 2012, S & Co. purchased inventory from H & Co. to the extent of Tk. 20,000 that was fully sold to 3rd parties during the year 2012. Required: (i) Give all journal entries recorded by H & Co. with regard to its investment in S & Co. during 2012. (ii) Give all eliminating entries needed to prepare consolidated financial statements for the year 2012. (iii) Prepare equity method consolidated work paper as of December 31, 2012. [Marks: (3+7+15) = 25] Q. No. 4. (a) Define monetary items according to IAS/BAS 21. (b) What factors must management take into account when determining the functional currency of a foreign operation? (c) Rumble Ltd is a retailer of fine furniture. On 19 October 2011 Rumble purchased 100 antique tables from a US supplier for a total of $3,600,000. Rumble has a year end of 31 December 2011 and uses sterling as its functional currency. Exchange rates are as follows: 19 October 2011 1=$1.8 15 December 2011 1=$1.9 20 December 2011 1=$1.95 31 December 2011 1=$2.0 Average rate for 2011 1=$1.6 3 February 2012 1=$2.4 Required: Determine, according to IAS21/BAS21 The Effects of changes in Foreign Exchange Rates, the impact of the above transaction on the profits of Rumble for the year ended 31 December 2011 and on the statement of financial position at that date under each of the following alternative assumption. Assumption 1 : All the tables were sold on 20 December 2011 and were paid for by Rumble on 15 December 2011. Assumption 2 : All the tables were sold on 3 February 2012 and were paid for by Rumble on 15 December 2011. Assumption 3 : All the tables were sold on 15 December 2011 and were paid for by Rumble on 3 February 2012. Assumption 4 : 75 of the tables were sold on 15 December 2011 with the remaining 25 tables being sold on 3 February 2012. All the tables were paid for by Rumble on 3 February 2012. [Marks: (5+5+15) = 25] Q. No. 5. D & Co. sells merchandise at both its head office in Dhaka and branch in Khulna. The head office bills merchandise shipped to the branch at 125% of head office cost, and is the only supplier for the branch. Shipments of merchandise to the branch have been recorded improperly by the head office by credits to Sales for the billed price. Both the head office and the branch use the perpetual inventory system. (5)

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Q. No. 5 (Contd) D & Co has engaged you to audit financial statements for the year ended December 31, 2012. You were provided with the following unadjusted trial balances: Head office Branch Items Tk. Tk. Cash 6,200 2,600 Accounts Receivable, net 4,000 4,400 Inventory 8,000 1,600 Branch Account: Khulna 9,000 Equipment, net 30,000 Dividend Declared 10,000 Cost of Goods Sold 50,000 18,600 Operating Expenses 14,000 7,200 Totals 131,200 34,400 Accounts Payable 4,600 Accrued liabilities 400 Long-term Notes Payable 10,200 Ordinary Shares 30,000 Retained Earnings, Jan. 1, 2012 8,400 Head Office 2,000 Sales 78,000 32,000 Totals 131,200 34,400 Additional information: (i) On January 1, 2012, inventory of head office amounted to Tk. 5,000 and inventory of the branch amounted to Tk. 1,200. During 2012, the branch was billed for Tk. 21,000 for shipments from the head office. (ii) On December 27, 2012, the head office billed the branch for Tk. 2,400, representing the branch's share of operating expenses paid by the head office. This billing had not been recorded by the branch. (iii) All cash collections made by the branch were deposited in a local bank to the bank account of the head office. Deposits of this nature included the following: Branch deposit date December 28, 2012 December 30, 2012 December 31, 2012 January 2, 2013 (iv) Head office record date December 31, 2012 January 2, 2013 January 3, 2013 January 5, 2013 Amount Tk. 1,000 600 1,400 400

Operating expenses incurred by the branch were paid from an imprest bank account that was reimbursed periodically by the head office. On December 30, 2012, the head office had mailed a re-imbursement cheque in the amount of Tk. 600, which had not been received by the branch as of December 31, 2012. (v) A shipment of merchandise from the head office to the branch was in transit on December 31, 2012. Required: (a) Prepare journal entries to rectify and adjust the accounting records of the head office of the D & Co. on December 31, 2012. Establish an allowance for over valuation of branch inventory. (b) Prepare journal entries to adjust the accounting records of the Khulna branch of the company on December 31, 2012.

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[Marks: (8+7) = 15] = THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 302. ADVANCED COST ACCOUNTING Time: Three Hours All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Q. No. 1. Samir & Co. is a manufacturing company which processes and cans tomato catsup in 24 ounce jar. The standard input for a batch is as follows: Particulars Pound Standard Price per Pound (Taka) Tomatoes 340 0.60 Corn Syrup 75 0.10 Vinegar 25 0.40 Salt 10 0.20 Onion powder, Spice and Flavoring 50 0.53 Input 500 Output 400 The recipe used not only is secret but also allows for some variation in ingredients in obtaining the special flavor. The following materials were purchased during the month. Direct materials inventory is kept at standard. Particulars Pound Actual Cost (Taka) Tomatoes 23,000 14,950 Corn Syrup 5,000 250 Vinegar 3,000 1,320 Salt 800 176 Onion powder, Spice and Flavoring 2,500 1,200 During the month 18,000 jars were filled with the following materials put in process: Particulars Pound [16 ounce= 1 pound] Tomatoes 22,100 Corn Syrup 3,900 Vinegar 1,900 Salt 500 Onion powder, Spice and Flavoring 1,950 Total 30,350 Required: (i) Compute a materials purchase price variance for each of the materials and a material total mix and total yield variance for the month. Indicate if the variance is favorable or unfavorable. (ii) Prepare journal entries to record the issuance of materials, the variance and the disposition of the variance. [Marks: (14+6) = 20] Full Marks:100

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 302. ADVANCED COST ACCOUNTING Q. No. 2. Padma Food Inc., a grocery chain consisting of different stores, operates in a state that permits each of its municipalities to levy an income tax on corporations operating with their respective city limits. This legislation establishes a uniform tax rate that may be levied by the municipality. Regulations also provide that the tax rates to be computed on income derived within taxing municipality after a reasonable and consistent allocation of general overhead expenses, which include warehouse, central office, advertising and delivery expenses. General overhead expenses have not been allocated previously to Padmas Store. General overhead expenses for the year were as follows: Particulars Delivery and warehousing expenses: Delivery expenses warehouse operations warehouse depreciation Central office expenses: Advertising Central office salaries Other central office expenses Total general overhead expenses Taka 40,000.00 30,000.00 20,000.00 18,000.00 37,000.00 28,000.00 Taka

90,000.00

83,000.00 1,73,000.00

Additional Information: (a) One fifth of the warehouse space is used to house the central office and depreciation of this space is included in the other central office. Warehouse operating expenses vary with the quality of merchandise sold. (b) All advertising is prepared by the central office and is distributed in the areas in which stores are located. (c) As each store was opened, the fixed portion of central office salaries increased by Tk. 7,000.00, which other central office expense increased by Tk. 2,500.00. Basic fixed central office were Tk. 10,000.00 and the basic fixed other central office expense was Tk. 12,000. The remainder of central office salaries and the remittance of other central office expenses vary with sales. (d) The delivery expense varies with the distance and the number of deliveries. The distances form the warehouse to each store and the number of deliveries made during the year were: Store Buriganga Karnaphuli Jamuna Miles 120 200 100 No. of Deliveries 140 64 104

The years operating results, before deducting general overhead expense and the tax for each store were:

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 302. ADVANCED COST ACCOUNTING Q. No. 2. (contd..) Particulars Net sales Less: Cost of goods sold Gross Profit Less: Other local operating exp. Fixed Variable Total Operating income before general overhead and income tax Buriganga 4,16,000.00 2,15,700.00 2,00,300.00 60,800.00 54,700.00 1,15,500.00 84,800.00 Store (in Taka) Karnaphuli Jamuna Total 3,53,600.00 2,70,400.00 1,040,000.00 1,83,300.00 1,40,200.00 5,39,200.00 1,70,300.00 1,30,200.00 5,00,800.00 48,750.00 64,220.00 1,12,970.00 57,330.00 50,200.00 27,448.00 77,648.00 52,552.00 1,59,750.00 1,46,368.00 3,06,118.00 1,94,682.00

Required: (i) Under each of the following allocation plans, compute the operating income for each store that would be subject to the municipal tax levy on corporation income: Plan 1: Allocate all general overhead expenses on the basis of sales volume. Plan 2: First, allocate central office salaries and the other central office expense equally to warehouse operations and to each store. Second, allocate the resulting warehouse operations expense, warehouse depreciation and advertising to each store on basis of sales volume. Third, allocate delivery expenses to each store on the basis of delivery miles multiplied by number of deliveries. (ii) Formulate a management decision to determine which store should be selected for expansion in order to maximize corporate profits. This expansion will increase Padmas sales by Tk. 60,000.00 and its local fixed operating expense by Tk. 7,500.00 and it will require ten additional deliveries from the warehouse. [Marks: (12+8) = 20] Q. No. 3. (a) What are the differences between normal and abnormal loss? Explain how both should be reported for management purposes. (b) The Kim Company is a furniture manufacturer with two departments - molding and finishing. The company uses the weighted average method of process costing. In August, the following data were recorded for the Finishing Department. Units of beginning work in process inventory 12,500 Percentage completion of beginning work in process units 25% Cost of direct materials in beginning work in process Tk. 0 Units started 87,500 Units completed 62,500 Units in ending inventory 25,000 Percentage completion of ending work in process units 95% Spoiled units 12,500

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 302. ADVANCED COST ACCOUNTING Q. No. 3. (contd..) Total costs added during current period Direct materials Direct manufacturing labor Manufacturing overhead Work in process, beginning Transferred in costs Conversion costs Cost of units transferred in during current period Tk. 819,000 Tk. 794,500 Tk. 770,000 Tk. 103,625 Tk. 52,500 Tk. 809,375

Conversion costs are added evenly during the process. Direct material costs are added when production is 90% complete. The inspection point is at the 80% stage of production. Normal spoilage is 10% of all good units that pass inspection. Spoiled units are disposed of at zero net disposal value. For August, summarize total costs to account for, and assign these costs to units completed and transferred out (including normal spoilage), to abnormal spoilage and to units in ending work in process. [Marks (5+15) = 20] Q. No. 4. (A) Rayman Company produces three chemical products, J1X, J2Y and B1Z. Raw materials are processed in single plant to produce two intermediate products, J1 and J2, in fixed proportions. There is no market for these two intermediate products. J1 is processed further through process X to yield the product J1X, product J2 is converted into J2Y by a separate finishing process Y. The Y finishing process produces both J2Y and a waste material, B1, which has no market value. The Rayman Company can convert B1, after additional processing through process Z, into a saleable by product, B1Z. The company can sell as much B1Z as it can produce at a price of Tk. 1.50 per kg. At normal levels of production and sales, 600,000 kg of the common input material are processed each month. There are 440,000 kg and 110,000 kg respectively, of the intermediate products J1 and J2, produced from this level of input. After the separate finishing processes, fixed proportions of J1X, J2Y and B1Z emerge as shown below with current market prices (all losses are normal losses): Product Quantity kg. Market Price per kg J1X 400,000 Tk. 2.425 J2Y 100,000 Tk. 4.50 B1Z 10,000 Tk. 1.50 At these normal volumes, materials and processing costs are as follows: Common plant Facility (Tk. 000) 320 150 30 50 550 Separate Finishing Processes (Tk. 000) (Tk. 000) (Tk. 000) 110 15 1.0 225 90 5.5 50 25 0.5 25 5 3.0 410 135 10.0

Direct materials Direct labour Variable overhead Fixed overhead Total

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 302. ADVANCED COST ACCOUNTING Q. No. 4. (contd..) Selling and administrative costs are entirely fixed and cannot be traced to any of the three products. Required: (a) Draw a diagram which shows the flow of these products, through the processes, label the diagram and show the quantities involved in normal operation. (b) Calculate the cost per unit of the finished products J1X and J2Y and the total manufacturing profit, for the month, attributed to each product assuming all joint costs are allocated based on: (i) Physical units (ii) Net realizable value (B) Discuss the arguments for and against each of the methods of allocating joint costs to products. [Marks: (5+10)+5= 20] Q. No. 5. (a) Given the strong cost orientation in a target costing environment, there is obviously a considerable role for the cost accountant on a design team. What are the specific activities and required skills of this person? (b) Many advocates of standard costing take the position that these costs are a proper basis for inventory costing for external reporting purposes. Accounting Research Bulletin No.43, however, reflects the widespread view that standard costs are not acceptable unless adjusted at reasonable intervals to reflect current conditions so that at the balanced sheet date standard costs reasonably approximate costs computed under one of the recognized bases. Required: (i) Discuss the conceptual merits of using standard costs as the basis for inventory costing for external reporting purposes. (ii) Prepare general journal entries for three alternative dispositions of a Tk. 1,500 unfavorable variance, when all goods manufactured during the period are included in the ending finished goods inventory. Assuming that a formal standard costs exceeding normal (attainable) standard cost and that Tk. 1,000 of the variance resulted from the difference between the theoretical (identical) standard and normal standard. (iii) Discuss the conceptual merits of each of the three alternatives methods of disposition requested in Requirement (ii) mentioned above. [Marks: 8+(3+5+4)= 20] = THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013 EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 303. CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES. Time : Three hours Full Marks: 100 Answer SIX questions taking any THREE from each Part including compulsory question No. 5 and 10. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. PART A: CORPORATE LAWS Q. No. 1. (a) Why is it mandatory to appoint Independent Directors? (b) What are the qualities and qualifications which an Independent Director must possess? (c) What are the responsibilities of the Chairman of an Audit Committee? Who should be the Chairman of an Audit Committee? [Marks: (35) = 15] Q. No. 2. (a) Success Limited a private limited company wishes to go public and get listed as they wish to raise funds through IPO. Explain the necessary procedures to be followed by success Limited. (b) What are the contents of a prospectus? [Marks: (8+7) = 15] Q. No. 3. (a) What are the requirements for good Corporate Governance as per the guidelines of SEC? (b) Why and how are Alternate Directors appointed? (c) A company wants to hold an EGM for incorporating new items in the Objects Clause. Explain the procedures involved. [Marks: (5+5+5) = 15] Q. No. 4. (a) Explain the functions of various Board Committees, excluding the Audit Committee. (b) What are the contents of an Annual Report of a public listed company? [Marks: (8+7) = 15] Q. No. 5. Write notes on any four of the following: (i) Special Resolution and Resolution requires special notice; (ii) Independent director and Nominee director; (iii) Share warrants and Dividend warrants; (iv) Doctrine of ultra vires and Doctrine of constructive notice; (v) Transmission of shares; (vi) Statutory meeting. [Marks: (4 x 5) = 20]

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CMA APRIL 2013 EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 303. CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES. PART B: CORPORATE GOVERNANCE & SECRETARIAL PRACTICES. Q. No. 6. (a) What are the contents of the notice of an AGM? When it is to be published in the Newspaper? (b) What are the agendas of a pre AGM Board Meeting? When and which decisions have to be communicated to DSC, CSC and SEC immediately after the pre AGM Board Meeting. [Marks: (8+7) = 15] Q. No. 7. (a) Compliance with SEC guidelines is now a very important issue. Discuss the factors involved in ensuring compliance. (b) What are the qualifications and experience required and the duties of a Company Secretary of a public listed company? [Marks: (8+7) = 15] Q. No. 8. Distinguish between the following: (a) Ordinary and Special business; (b) Minutes and Resolutions; (c) Floating charge and Fixed Charge. [Marks: (3 x 5) = 15] Q. No. 9. (a) What are the procedures involved in the issue of Rights Shares? (b) What is the role and functions of CDBL? [Marks: (8+7) = 15] Q. No. 10. Write short notes on any four of the following: (a) Record date; (b) Annual Return; (c) Form IX; (d) Stock Dividend; (e) Resolution by Circulation; (f) Price Sensitive Information. [Marks: (5+5+5+5) = 20]

==THE END==

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 304. AUDITING. Time: Three Hours All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Full Marks:100

Q. No. 1. (a) As stated in ISA-200, what are the overall objectives of the auditors? (b) Before starting an audit, terms of audit engagement should be established with the client (auditee). This may usually take the form of a letter confirming the terms of engagement. List at least six points which you will include in an engagement letter. (c) Under ISA-200, what are the inherent limitations of an audit? (d) XYZ & Co., Chartered Accountants are the auditor of Alpha Ltd. for the year 2012. After completion of audit for the year 2012, the auditor did not send any consent letter for reappointment for the year 2013. Shall XYZ & Co. is eligible for re appointment? Answer the question as per the relevant provision of the Companies Act 1994. [Marks: (3+3+5+4) = 15] Q. No. 2. (a) What do you understand by Cut off procedure in respect of verification of Stocks and Accounts Receivables? (b) During the External Audit of ABC Ltd. for the year ended 31 December, 2012 following matters were discovered: (i) Cash receipts from customers, listed as outstanding lodgments in the bank reconciliation at the year end, were cleared through the bank on 22 January, 2013; and (ii) A sales credit note, relating to pre-year-end delivery of inventory, was issued to major customer on 21 January, 2013. Explain why this matter should be investigated further. (c) ISA-300, states that an auditor must plan the audit, Explain why it is important to plan an audit. [Marks: (5+5+5) = 15] Q. No. 3. (a) Computer Assisted Audit Techniques (CAAT) are used to assist an auditor in the collection of audit evidence from computerized systems. List and briefly explain four advantages of CAATs. (b) Explain walk-through test with suitable example. (c) What includes audit evidence? Briefly explain the procedures to obtain audit evidence. [Marks: (5+5+5) = 15]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-III SUBJECT: 304. AUDITING. Q. No. 4. (a) The concept of materially is fundamental to the work of Auditors. Matters that are immaterial are not reported in financial statements. Required: (i) explain the concept of materiality. (ii) describe how materiality affects the audit work performed by auditors. (iii) give an example of qualitative materiality. (b) Auditors integrity, objectivity and independence are subject to various threats and that safeguards must be in place to counter these. Please explain in details the threats and safeguards of its? [Marks: (4+4+2+5) = 15] Q. No. 5. (a) ISA-230, Audit Documentation establishes standard and provides guidance regarding documentation in the context of audit of financial statements. List the purposes of audit working papers. (b) What is accounting estimate? What will be auditors approach to audit of accounting estimates? (c) Explain the Brief Audit Strategy and Audit Plan. [Marks: (6+6+3) = 15] Q. No. 6. (a) What do you understand by the term going concern? (b) Briefly describe how you would as an auditor, evaluate managements assessment of the entitys ability to continue as a going concern. (c) Write some examples of events or conditions which individually or collectively may cast significant doubt about the going concern assumption. (d) What are the responsibilities of auditor in regards to going concern assumption? [Marks: (3+4+4+4) = 15] Q. No. 7. (a) Auditors normally express his audit opinion by reference to the true and fair view, which is an expression of reasonable assurance. Briefly define the terms true and fair. (b) Write briefly the elements of audit report according to ISA-700 and what are the matters with which the auditors imply satisfaction in an unqualified report under the Companies Act-1994? [Marks: (5+5) = 10] = THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 401. FINANCIAL MANAGEMENT Time: Three Hours All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Full Marks:100

Q. No. 1. (a) Explain Gordons share valuation model with suitable illustration. What are the advantages of this model? (b) Write short notes on: (i) Coupon rate; (ii) Yield to Call; (iii) Zero Coupon bond; (iv) Default risk of a bond. [Marks: (10+10) = 20] Q. No. 2. (a) Grameen Ltd. Expects to be Tk. 100,000 every year forever as on EBIT. The firm can borrow at 14%. Currently it has no debt, and its cost of equity is 20%. Corporate tax rate is 40%. Required: (i) What is the value of the firm? (ii) What will be the value if the company borrows Tk. 200,000 and uses the proceeds to repurchase the shares? (iii) What will be the WACC of the firm? (iv) What will be the value if tax rate on bond holders income is 20% and tax on equity holders income is 18%. [Marks: (3X4) =12] (b) Teletalk is an unlevered firm. The summary of its financial position is as : Asset Tk. 30,00,000, EBIT Tk. 500,000; Cost of capital Ks (Equity capital) 10%; Stock price Po Tk. 15; Shares outstanding 2,00,000 and corporate tax rate is 40%. Currently Teletalk is considering selling bonds and simultaneously repurchasing of its some stock. if Teletalk uses Tk. 9,00,000 of debt, its cost of equity, Ks will increase 11% to reflect increased risk. Bonds can be sold at a cost Kd of 7%. As Teletalk is a non-growth firm, so all its earnings are pain out as dividends. The earnings are exceptionally constant overtime. Required: (i) What would be the effects of the use of leverage on the value of the firm? (ii) What would be the price of Teletalks stock? (iii) Is there any impact of recapitalization on the firms earning per share? [Marks: (3X5)=15] Q. No. 3. (a) Ajanta Textiles equity shares currently sells for Tk. 23 per share. The companys finance manager anticipates a constant growth rate of 10.5 percent and end of year dividend of Tk. 2.50. Required: (i) What is the expected rate of return? (ii) If the investors require a 17% return should he purchase the stock?

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 401. FINANCIAL MANAGEMENT Q. No. 3. (contd.) (b) HP Rao can buy an equity that will Tk. 2.00 in dividends annually over the next 3 years. The earnings of the company are expected to grow and the equity is expected to reach a price of Tk. 70.00 per share at the end of the three years. This is a conservative investment and Rao expects a yield of 18 percent. What price should Rao pay for the equity if he wish to earn 18 percent? [Marks: (6+7) = 13] Q. No. 4. Grameenphone, widely known as GP, is the leading telecommunications service provider in Bangladesh. It is a joint venture enterprise between Telenor and Grameen Telecom Corporation, a non-profit sister concern of the internationally acclaimed microfinance organization and community development bank Grameen Bank. Telenor, the largest telecommunications company in Norway, owns 60% shares of Grameenphone and Grameen Telecom owns the remaining 40%. This foreign subsidiary is not wholly owned by the parent and the foreign project is partially financed with retained earnings of the parent and of the foreign subsidiary. So, Grameenphone has to balance the interest of both parties and enhance the value of the corporation side by side. 1. The parent company has invested BDT 35.8 billion in 2008 to develop the network infrastructure including working capital. The total amount of investment in Bangladesh includes funds both from the parent and subsidiary. We are considering only the fund from the parent company Telenor. If we imposed a fixed exchange rate of USD 1= BDT 69.2, the U.S. dollar amount the parents initial investment is USD 517,715,112. According to the going concern principle, the company expects to run its business for an unlimited future period. So, to prepare a capital budgeting model for the company we consider fixed revenue earned by the company, for the upcoming future period. The total revenue will be fixed at BDT 46,684,747,000. However, there are lots of sources of revenue like Subscription revenue-postpaid BDT 448,537,000, Connection revenue BDT 384,660,000, Roaming revenue BDT 386,933,000, Interconnection revenue mobile operators BDT 4,605,378,000, other operating revenue BDT 1,792,891,000 and other Income, net BDT 38,156,000. The costs are also thought to be fixed for in finite time period. These Costs and expenses including Operating expenses, such as direct cost of network revenue, network operation and maintenance expenses, general and administrative expenses, selling and distribution expenses and Bad debt expense. The estimated expenses based on present observation are BDT 12,792,566,000, BDT 2,442,553,000, BDT 5,627,680,000, BDT 6,660,418,000 and BDT 135,290,000 respectively. The subsidiary uses the maximum rate of depreciation allowed by Bangladesh government which is BDT 10,395,824,000. Bangladesh government will impose 45% tax rate on income. In addition it will impose a 10% withholding tax on any fund remitted by the subsidiary to parent. Company submitted its tax return file to tax authorities and paid tax BDT 10,475,013,000 thereon. Companys required rate of return is 17% at perpetuity basis.

2.

3.

4. 5.

6.

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 401. FINANCIAL MANAGEMENT Q. No. 4. (contd.) Required: (i) Explain and determine, with investment appraisal techniques, whether the above investment will be worthwhile or not for Parent company Telenor. (ii) Exposure to exchange rate fluctuations: Grameenphone realizes that the exchange rate will typically change over time, but it does not know whether the Bangladeshi taka will strengthen or weaken in the future. Foreign exchange rate in these two scenarios would be (a) Strong USD 1=BDT 65 and (b) Weak USD 1 = BDT 72. What will be impact on NPV under strong and weak scenarios and also explain which scenario will be favourable for Parent company Telenor? (iii) Although Bangladesh does not any restriction on foreign subsidiarys to block funds that the subsidiary attempts to send to the parent, to narrate the impact of blocked fund on capital budgeting, we are to assume Bangladesh government has imposed restriction on Grameenphone on remitting cash flows for 5 years. Let us assume, Grameenphone invests the fund in marketable securities which are expected to yield 8% annually after taxes. What would be impact on NPV? (iv) Bangladesh has a history of facing volatile inflation rate year to year and thus can influence a projects net cash flows. The inflation rate of Bangladesh for following years is given: Year Inflation rate Net Profit in million BDT 2009 8.90% 4,750 2008 9.10% 2,900 2007 7.10% 3,060 2006 7.00% 7,848 2005 6.00% 6,913 2004 5.60% 6,183 Explain the impact of inflation on Companys Profitability. [Marks: (7+5+5+3) = 20] Q. No. 5. Olivine, a holiday tour operator has recently taken an interest in Halite, a charter airline business. Both companies have the same level of risk. Abbreviated financial statements of each company are set out below: Abbreviated statements of income for the year ended 31st December 2011 Olivine Halite Tk.m Tk.m Sales Operating Profit Interest Charges Net profit before taxation Company tax Net profit after taxation Dividends Accumulated profits for the year 182.6 43.6 12.3 31.3 6.3 25.0 6.0 19.0 75.2 21.4 10.2 11.2 1.6 9.6 4.0 5.6

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 401. FINANCIAL MANAGEMENT Q. No. 5. (contd.) Abbreviated statement of financial position for the year ended 31st December 2011 Olivine Tk.m 135.4 65.2 200.6 120.5 80.1 Halite Tk.m 127.2 3.2 130.4 104.8 25.6

Non-current assets Net current assets Payables due after more than one year Capital and reserves Tk. 0.50 ordinary shares Retained profit

20.0 8.0 60.1 17.6 80.1 25.6 Price/earnings ratio before the bid 20 15 The Board of Directors of Olivine is considering making an offer to the shareholders of Halite of five shares in Olivine for every four shares held. It is believed that a rationalization of administrative functions arising from the merger would reap after tax benefits of Tk. 2.4m Required: (a) Calculate: (i) The total value of the proposed offer (ii) The earnings per share of Olivine following the successful acquisition of Halite (ii) The share price of Olivine following acquisition, assuming that the benefits of the acquisition are achieved and that the price/earnings ratio declines by 5%. (b) Calculate the effects of the proposed takeover on the wealth of the shareholders of each company. (c) Discuss your results in (a) and (b) above and state what recommendations, if any, you would make to the directors of Olivine. [Marks: (10+5+5) = 20] = THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 402. STRATEGIC MANAGEMENT ACCOUNTING. Time: Three Hours Full Marks:100 All questions are to be attempted. Show computations, where necessary. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Q. No. 1. (a) How does converting from a traditional purchasing system to a JIT purchasing system reduce purchasing and receiving costs? (b) JC Penny makes and sells a range of ornamental products in overseas market. JC Penny employs experienced sculptors who have an excellent reputation for producing high-quality products. JC Penny has been approached by The Superior Garden Group (SGG) and asked to make two products. The two products are a water fountain known as The Fountain and a large garden gnome known as The Goblin. The management accountant of JC Penny has estimated the variable costs per unit of The Fountain and The Goblin as being Tk.62250 and Tk.10375 respectively. She based her calculations on the following information: (1) Product data : The Fountain The Goblin Other products Production/sales (units) 2,000 4,000 16,000 Tk.000 Tk.000 Tk.000 Total direct material costs 450 150 1,200 Total direct labour cost 300 100 1,200 (2) Total variable overheads for JC Penny will amount to Tk.2,400,000 of which 30% relates to the procurement, warehousing and use of direct materials. All other variable overheads are direct labour related. (3) JC Penny currently absorbs variable overheads into product units using company-wide percentages on total direct material cost and total direct labour cost. (4) SGG is willing to purchase The Fountain at Tk.750 per unit and The Goblin at Tk.150 per unit. (5) JC Penny will not undertake any work which does not yield an estimated contribution to sales ratio of 28%. (6) The directors of JC Penny are considering switching to an activity-based costing system and recently appointed a firm of management consultants to undertake a detailed review of existing operations. As part of that review, the management consultants concluded that estimated relevant cost drivers for material and labour related overhead costs attributable to The Fountain and The Goblin are as follows: The Fountain The Goblin Other Products Direct material related overheads: The cost driver is the volume of raw materials held to facilitate production of each product. Material proportions per product unit: 4 7 4 Direct labour related overheads: The cost driver is the number of labour operations performed. Labour operations per product unit: 6 5 4 Required: (i) Calculate variable cost per unit of both products using an activity-based costing approach. (ii) Using the unit cost information available and your calculations in (i), prepare a financial analysis of the decision strategy which JC Penny may implement with regard to the manufacture of each product. (iii) Critically discuss the adoption of activity-based management (ABM) in companies such as JC Penny. [Marks: {3+(7+5+5)} =20]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 402. STRATEGIC MANAGEMENT ACCOUNTING. Q. No. 2. (a) State the reasons why the net present value investment appraisal method is preferred to other investment appraisal methods such as payback, return on capital employed and internal rate of return. (b) ABE-ZA Ltd. has just installed Machine-R at a cost of Tk. 2,00,000. The machine has a five year life with no residual value. The annual volume of production is estimated at 1,50,000 units, which can be sold at Tk. 6 per unit. Annual operating cost are estimated at Tk. 2,00,000 (excluding depreciation) at this output level. Fixed costs are estimated at Tk.3 per unit for the same level of production. ABE-ZA Ltd. has just come across another model called Machine-S capable of giving the same output at an annual operating cost of Tk. 1,80,000 (exclusive of depreciation). There will be no change in fixed costs. Capital cost of this machine is Tk. 2,50,000 and the estimated life is for 5 years with no residual value. The company has an offer for sale of Machine-R at Tk.1,00,000. The cost of dismantling and removal will be Tk. 30,000. As the company has not yet commenced operations, it wants to sell Machine-R and purchase Machine-S. ABE-ZA Ltd will be a zero-tax company, for seven years in view of several incentives and allowances available. The cost of capital may be assumed at 14 per cent. Required: (i) Advice whether the company should opt for replacement. (ii) Will there be any change in your view if Machine-R has not been installed but the company is in the process of selecting one or the other machine? [Marks: {5+(9+6)} =20] Q. No. 3. A large business consultancy firm is organized in to several divisions. One of the divisions is the Information Technology (IT) division which provides consultancy services to its clients as well as to the other divisions of the firm. The consultants in the IT divisions always work in a team of three professional consultants on each day of consulting assignment. The external clients are charged a fee at the rate of TK 4,500 for each consulting day. The fee represents the cost plus 150% profit mark-up. The break-up of cost involved in the consultancy fee is estimated at 80% as being variable and the balance is fixed. The textiles division of the consultancy firm which has undertaken a big assignment requires the services of two teams of IT consultants to work five days in a week for a period of 48 weeks. While the director of the textiles division intends to negotiate the transfer price for the consultancy work the director of IT division proposes to charge the textiles division at Tk. 4,500 per consulting day. In respect of the consulting work of the textiles division, IT division will be able to reduce the variable costs by Tk. 200 per consulting day. This is possible in all cases of internal consultations because of the use of specialized equipment. You are required to explain the implications and set transfer prices per consulting day at which the IT division can provide consultancy services to the textiles division such that the profit of the business consultancy firm as a whole is maximized in each of the following scenarios: (i) Every team of the IT division is fully engaged during the 48-week period in providing consultancy services to external clients and that the IT division has no spare capacity of consultancy teams to take up the textiles division assignment. (ii) IT division will be able to spare only one team of consultants to provide services to the textiles division during the 48-week period and all other teams are fully engaged in providing services to external clients. (iii) A new external client has come forward to pay IT division a total fee of Tk. 1,584,000 for engaging the services of two teams of consultants during the aforesaid period of 48 weeks. [Marks: 20]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 402. STRATEGIC MANAGEMENT ACCOUNTING. Q. No. 4. (a) Describe different types of benchmarking of critical success factors. (b) How the implementation of JIT approach to manufacturing can be a major source of competitive advantage? (c) A project Manager has to manage various projects. For each project given below, you are required to advise him whether to use PERT or CPM and briefly state the reason: (i) Project K is yet to begin. The manager has recently successfully handled similar projects. He has able to break down the project into smaller modules and knows when he may comfortably finish each module. (ii) Project L has been sanctioned some fixed amount. Though the manager is familiar about what time it will take, he expects pressure towards the end to finish the project slightly earlier, by deploying additional resources of the company. (iii) Project M is new to the manager. He has never handled such a project. He can break up the project into smaller modules, but even then, he is not sure of their exact times. (iv) Project N has a limitation on the skilled workforce available. But the manager knows from earlier experience, the slack on each event in the project. He is confident of handling the bottleneck of labor. (v) Project O is a research project, bound to produce immense benefit to the company is future. (d) A project consists of seven activities and the time estimates of the activities are furnished below: Days Activity Optimistic Most likely Pessimistic 1-2 4 10 16 1-3 3 6 9 1-4 4 7 16 2-5 5 5 5 3-5 8 11 32 4-6 4 10 16 5-6 2 5 8 Required: (i) Draw the network diagram. (ii) Identify the critical path and its duration. (iii) What is the probability that the project will be completed in 5 days earlier than the critical path duration? (iv) What project duration will provide 95% confidence level of completion (Z0.95 = 1.65)? Given: Z Probability

1.00 0.1587

1.09 0.1379

1.18 0.1190

1.25 0.1056

1.33 0.0918 [Marks: (3+3+5+12) = 23]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 402. STRATEGIC MANAGEMENT ACCOUNTING. Q. No. 5. The costs and selling prices per unit of two products manufacturing by a company are as under: B (Tk.) Product A (Tk.) Selling price 500 450 Variable costs: Direct Materials @ Tk. 25 per kg 100 100 Direct Labor @ Tk. 20 per hour 80 40 Painting @ Tk. 30 per hour 30 60 Variable overheads 190 175 Fixed costs @ Tk. 17.50 per direct labor hour 70 35 Total costs 470 410 Profit 30 40 In any month the maximum availability of inputs is limited to the following: Direct Materials : 480 kg Direct Labor hours : 400 hours Painting hours : 200 hours Required: (i) Formulate a linear program to determine the production plan which maximizes the profits by using graphical approach. (ii) State the optimal product mix and the monthly profit derived from your solution in (i) above. (iii) If the company can sell the paints time at Tk. 40 per hour as a separate service, show what modification will be required in the formulation of the linear programming problem. You are required to re-formulate the problem but not to solve. [Marks: (5+7+5) = 17] = THE END =

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 403.STRATEGIC MANAGEMENT AND ORGANIZATIONAL BEHAVIOUR. Time: Three Hours Full Marks : 100 Answer any THREE questions from Group A and TWO questions from Group B. All questions carry equal marks. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. GROUP - A : STRATEGIC MANAGEMENT (TOTAL MARKS: 60) Q. No. 1. (a) What is strategy? (b) Assume that you are the manager of fast growing international business firm. What strategic approaches would you adopt to achieve sustainable competitive advantages? Explain. (c) Strategy is partly proactive and partly reactive. Explain. [Marks: (2+12+6) = 20] Q. No. 2. (a) What is a low-cost strategy? (b) Explain the situations when low cost provider strategy can work best. (c) What are the pitfalls of a low-cost provider strategy? [Marks: (3+12+5) = 20] Q. No. 3. (a) What is Corporate Culture? (b) How culture can promote better strategy execution? (c) How would you create a strong fit between strategy and culture? [Marks: (3+10+7) = 20] Q. No. 4. (a) What urge a business concern to enter into foreign markets? (b) Highlight the risks of strategic alliance with foreign partners. (c) What make effective strategic alliance with foreign partners? [Marks: (6+6+8) = 20] Q. No. 5. (a) How is business environment analysis related to fix internal competencies with external opportunities of a business organization? (b) Sequentially conduct the business environment analysis, SWOT Analysis, and formulate the strategy for a newly started motorbike manufacturing company in Bangladesh. (c) One of the most important tools for assessing the strength of an organization within its industry is financial analysis. Explain. [Marks: (6+6+8) = 20]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 403.STRATEGIC MANAGEMENT AND ORGANIZATIONAL BEHAVIOUR. GROUP - B : ORGANIZATIONAL BEHAVIOUR (TOTAL MARKS: 40) Q. No. 6. (a) Asses the significance of OB in management. (b) Sketch a standard model of OB. (c) Explain the sketched model as per requirement in (b) above. [Marks: (5+7+8) = 20] Q. No. 7. (a) Describe the cross-cultural challenges of motivation. (b) Analyze the application of Maslows and Herzbergs theories to Bangladesh where unemployment rate is very high. (c) Contrast job-based and skill-based pay. [Marks: (6+10+4) = 20] Q. No. 8. (a) What is personality? (b) What behavioral predictions you might make if you know that an employee had (i) an external locus of control? (ii) low self esteem? (iii) a Type A personality? (c) What is emotional intelligence and why is it important? [Marks: (4+12+4) = 20] Q. No. 9. (a) What is perception? (b) What is attribution theory? What are its implications for explaining organizational behavior? (c) How does selectivity affect perception? Give an example of how selectivity can create perceptual distortion. [Marks: (2+8+10) = 20] == THE END ==

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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 404. COST AND MANAGEMENT AUDITING. Time: Three Hours All questions are to be attempted. Answer must be brief, relevant, neat and clean. Start answering each question from a fresh sheet. Full Marks:100

PART A: COST AUDITING (MARKS 50) Q. No. 1. (a) What is the importance of planning of Cost Audit? What are the key factors that should be considered for planning purpose? (b) Write briefly about review of Cost Accounting records by Cost Auditor during the course of audit. (c) Why Cost Audit report is important for Statutory Auditor? [Marks: (4+4+4) = 12] Q. No. 2. (a) What matters should be considered for evaluation and measurement of capacity utilization by Cost Auditor? (b) What is the importance of professional ethics and code of conduct for a cost and management accountants in practice? (c) A company does not have a system of internal audit but states that it has introduced adequate internal controls. What are the obligations of the cost auditor in this regard? [Marks: (4 x 3) = 12] Q. No. 3. (a) You are a partner of a newly established cost audit firm and trying to pursue the management of a fifty one percent government owned power distribution company for getting appointment for conducting cost audit of the company. The Managing Director of the company expresses his opinion that the company is being audited by statutory financial auditor. So, they dont require any further audit which may make additional hassle as well as involvement of cost. You are required to write to a report to the chairman of the Board of directors showing rationale of cost audit of the company. (b) Do you think that proper implementation of cost audit in power and energy sector can improve the prevailing crisis in the sector? Why? [Marks: (7+6) = 13] Q. No. 4. (a) Evergreen is a textile manufacturing company maintains its production on the basis of customers orders. It has appointed you to give suggestions on production efficiency and application of factory overheads for product pricing? For submission a report how would you conduct the job? (b) Karnafuli Textile is a government owned company is being operated with sever shortage of working capital due to incurring continuous loss. The management primarily detected the reasons of loss are imbalanced production facilities with inefficient production management. The company has huge unutilized valuable land within its boundary. You have been appointed as a cost auditor of the company. In what areas you have to evaluate for your conclusion and how the diagnosis and suggestions will be conveyed to the management through the cost audit report? [Marks: (6+7) = 13]

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CMA APRIL 2013, EXAMINATION PROFESSIONAL LEVEL-IV SUBJECT: 404. COST AND MANAGEMENT AUDITING. PART B : MANAGEMENT AUDITING (MARKS 50) Q. No. 5. (a) Define objective of management auditing. Outline the general approach of a management audit, before commencement of audit. (b) Describe the roles and responsibilities of management and the management auditor in the prevention and detection of fraud. [Marks: (5+5) = 10] Q. No. 6. (a) Define Corporate Governance. Compare management auditing and performance measurement. (b) Management Auditors Act as consultants both of senior management and to the board of directors of a manufacturing company. Briefly explain. [Marks: (4+8) = 12] Q. No. 7. (a) As a management Auditor how would you evaluate the effectiveness of a Management Information System in a manufacturing organization? (b) Draw a model questioner with a view to review supply chain management of a large textile manufacturing company. [Marks: (6+6) = 12] Q. No. 8. (a) One of the much talked banking scandals in Bangladesh is Hallmark Banking Fraud. As a professional Management Accountant, express your views regarding the possible weakness that was prevailing in the procedure of sanctioning loans and advances by Sonali Bank? What might be the possible suggestions to strengthen the procedure of sanctioning loans? (b) How proper functioning of audit committee can minimize frauds in banking sector? [Marks: (11+5) = 16] = THE END =

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