Question No: 43 ( Marks: 3 )
For what purpose Prospectus is issued by the Companies?
Question No: 44 ( Marks: 3 )
Paid up capital on 1st January, 2007 was 124,000 shares of Rs. 10 each
Fresh issue of share capital on 31st March, 2007 was 24,000 shares of Rs. 10 each
Profit before tax 330,000
Tax rate 40%.p.a
Then, calculate Earning per share for 2008.
Question No: 45 ( Marks: 3 )
ABC Limited exchanged Oil with XYZ Limited,
Cost of Oil given up by ABC Limited 10,000
Cost of Oil received by ABC Limited 10,000
Pass Journal Entries in the books of both parties.
Question No: 46 ( Marks: 5 )
Classify the followings as Operating, Investing or Financing activities:
Sr.#. Entries Classification
0 Change in Accounts receivable and Inventory Operating activity
1 Change in Property, Buildings and Equipment investing activity
2 Change in Accumulated depreciation & amortization operating activity
3 Change in Accounts payable, Accrued wages & Salaries payable operating activity
4 Change in Note payable operating activity
5 Net income operating activity
Question No: 47 ( Marks: 5 )
What are the different ways of defining Contingent Liabilities with respect to IAS-37?
Question No: 48 ( Marks: 10 )
For the year ended 31st December 2007, ABC Company reported a Net Income of Rs.
84,000. The opening and closing balances of Current assets and Current liabilities were
Current Assets: 2007 2006
Cash 60,000 80,000
Accounts receivable 250,000 190,000
Inventory 437,000 360,000
Prepaid expenses 12,000 14,000
Accounts payable 420,000 390,000
Accrued liabilities 8,000 12,000
Company s Income Statement for the most recent year was as follows:
For the year ended 31st December, 2007
Less: Cost of goods sold 580,000
Gross margin 420,000
Less Operating expenses 300,000
Income before taxes 120,000
Less income taxes (30%) 36,000
Net Income 84,000
Using the direct method, convert the company s Income Statement to a cash basis if the
depreciation charges were Rs. 50,000 and the Deferred Income Taxes on the balance
sheet increased by Rs. 60,000 during the year.
An asset has been leased on July 01, 2005 at a cost of Rs. 871,000. The security deposit Rs. 300,000 and lease rentals include 4 annual installments of Rs. 200,000 each, starting from June 30, 2006. The implicit rate of return (IRR) is 15% p.a. Depreciation is to be charged at 20% on written down method and Residual value is Rs. 200,000.
Draw the entries for the following:
1. Recording of asset at the inception of lease
2. Recording of current maturity at the inception of lease
3. Payment of security deposit
4. Payment of first rental installment as on June 30, 2006
5. Recording of current maturity as on June 30, 2006
Question No: 49 ( Marks: 10 )
Briefly describe the disclosure requirements of Operating Lease with respect to standard.
Q. 29: (Marks 3)
How would you disclose this matter in notes to the accounts for the year 2008?
We will disclose this matter in notes to the accounts for the year 2008 as follows:
Investment in Subsidiary:
Cost of Investment Rs. 17,401,095
Company’s share in loss of subsidiary Rs. 3,129,441
Net Investment Rs. 14,271654
Q. 30: (marks 3)
What items are included in Notes to the accounts of Stock In Trade?
The following items may be included in Notes to the Accounts of Stock in Trade:
Q. 31: (Marks 5)
What do you know about the Bad Debts and Doubtful debts? What factors determine the debts are bad?
Such debts which have been doubted that those debts are not recoverable are recorded in the head of Doubtful Debts.
Such debts which are not receivables conformingly are recorded as Bad debts and are written off in the current period as an expense.
Factors that determine bad debts are:
Q. 32: (Marks 5)
Define Current Liabilities. What heads should be included in Current Liabilities?
The current liabilities are all of such liabilities which are expected to be paid within on accounting or period or within 12 months period.
Heads of Current Liabilities:
Mainly the current liabilities are classified into following categories:
Explain in light of IAS 7 "Cash Flows" what is meant by Cash Flow from
Investing Activities? Give examples.
What is the method of recognition in case of exchange of similar assets?
What are the disclosure requirements of the Companies Ordinance 1984 for
What conditions are to be satisfied for recognition of revenue from sale of
Briefly explain the following methods for measurement of elements of
• Historical cost
• Current cost
• Realizable value
• Present value
How is a surplus on revaluation of assets treated?
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