Corporate Accounting – Practice Set : Solution
Issue of Shares
1 (a) 2 (a) 3 (b) 4 (a) 5 (c) 6 (b) 7 (d) 8 (d) 9 (b) 10 (a) 11 (b) 12 (d) 13 (d) 14 (d) 15 (a) 16 (c) 17 (c) 18 (b) 19 (b) 20 (b) 21 (c) 22 (a) 23 (b) 24 (a) 25 (a) 26 (b) 27 (b) 28 (d) 29 (d) 30 (c) 31 (c) 32 (a) 33 (c) 34 (b) 35 (b) 36 (a) 37 (d) 38 (d) 39 (c) 40 (a)
Issue of Shares – Numerical
1 (d) 2 (b) 3 (a) 4 (d) 5 (a) 6 (d) 7 (c) 8 (c) 9 (d) 10 (a) 11 (a) 12 (a) 13 (a) 14 (c) 15 (b) 16 (d) 17 (d) 18 (c) 19 (c) 20 (b) 21 (c) 22 (a) 23 (c) 24 (c) 25 (a) 26 (a) 27 (a) 28 (a) 29 (d) 30 (b)
Marginal Costing & Profit Volume Analysis – Numerical
1 (i) Rs.13,600 (ii) Rs.4,000 (iii) Rs. 17000
2 (i) 40 % (ii) 25% (iii) 16 % (iv) 52 % (v) 50%
3 (i) Rs.75000 (ii) Rs.90,000 (iii)
4 Rs. 105
5 (i) 40 % (ii) Rs. 4,000 (iii) Rs,16000
6 () 7 () 8 () 9 () 10 () 11 () 12 (b) 13 () 14 () 15 () 16 (c) 17 () 18 () 19 () 20 ()
Marginal Costing & Profit Volume Analysis
1 (d) 2 (d) 3 (c) 4 (b) 5 (b) 6 (b) 7 (b) 8 (c) 9 (a) 10 (c) 11 (a) 12 (a) 13 (d) 14 (d) 15 (d) 16 (c) 17 (a) 18 (a) 19 (c) 20 (b)
Part I
Part II
Part III
Budgetary Control
1 (d) 2 (b) 3 (b) 4 (c) 5 (d) 6 (a) 7 (a) 8 (b) 9 (a) 10 (b) 11 (d) 12 (a) 13 (b) 14 (c) 15 (b)
Budgetary Control – Numerical
1 (d) 2 (d) 3 (a) 4 (b) 5 (a)
Scope and Source of Finance
1 (c) Maximization of Shareholders’ Wealth, 2 (d) None of the above 3 (d) All of the above 4 (b) Risk and Return 5 (b) Variability of Future Outcome 6 (c) Financial Decision-making 7 (d) All of the above 8 (c) Financial Accounting 9 (c) Market Price of Equity Shares 10 (a) Dividend Payout Decision 11 (b) Creating Shareholders’ value 12 (d) Risk and Return 13 (c) Maximize the PV of Equity Returns 14 (a) Maximizing MP of Equity Shares 15 (d) Maneuvering the Shares Price 16 (d) Risk-Return Trade off 17 (a) Designing Optimal Capital Structure 18 (b) Reinvestment Requirement
Capital Budgeting
1 (a) If PI < 1, its NPV is less than zero. 2 (a) Net Present value 3 (b) Discount Rate 4 (a) Only the best project is selected. 5 (c) Both (a) and (b) 6 (c) Earlier Cash Flows 7 (c) Both (a) and (b) 8 (b) PV of outflows 9 (b) Net addition to Wealth 10 (d) None of the above 11 (d) Payback Period 12 (a) Only the best one 13 (c) Internal Rate of Return 14 (a) Higher, 15 (c) Internal Rate of Return 16 (c) Profitability Index, 17 (d) None of the above 18 (b) 4 years 19 (c) That the project returns Rs. 1.30 for every Rs.1 invested in projected 20 (a) Average expected profit 21 (a) Discounting Procedure 22 (c) NPV method is superior to Payback method as the former considers time value of money. 23 (b) Decrease in working capital, 24 (b) NPV will be zero 25 (d) Changes in the signs of Cash flows 26 (c) (a) & (b)
1 (a) Income Tax Act 2 (d) I II III IV 3 (c) II III IV V 4 (c) 15 days 5 (b) Assessee 6 (c) I III V 7 (d) An employee assessee of college who worked during 1/4/2018 to 31/3/2019 8 (c) 2 3 4 1 9 (b) 20 Lakh
10 (d) Book Profit 11 (b) Adjusted Total Income 12 (b) Basic Tax Liability 13 (a) Income-tax Act, 1961
14 (c) Both in the Income-tax Act, 1961 and the Annual Finance Act 15 (c) I III 16 (a) 6 17 (a) 1961
18 (d) A person whose income is below the exemption limit 19 (b) Income tax plus surcharge if any
20 (d) Body of Individual 21 (b) Rs. 2,50,000 22 (c) Rs. 2,500 23 (b) 1860 24 (c) Nil
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