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PAPER-I
Note: Attempt FOUR questions in all, including QUESTION NUMBERS 1 AND 6 which are
COMPULSORY. Question No. 1carries 40 marks and all others carry 20 marks each.
1. The following is the trial balance of Rehman & Co for the year ended on December 31,1999:
Sales-net 5,323,410
Insurance 9,750
Required:
Prepare trading, profit and loss account and balance sheet as at December 31, 1999.
2. The following balance sheets relate to Waqar Ltd. and Shahab Ltd. as at December
31, 1999:
Capital Liabilities
Assets
6,328,000 4,040,000
Waqar Ltd. acquired its shares in Shahab Ltd. on December 31, 1998.
The Board of Directors of Waqar Ltd require Rs. 8,000,000 to finance a new project and have approached
bank to borrow this amount.
Required:
(a) Prepare a consolidated balance sheet of the Holding Company as at December 31, 1999.
(b) Offer comments on the proposal to borrow Rs. 8,000,000 from the bank.
3. Explain and differentiate between a fixed budget and a flexible budget. State benefits of both the above
types. Illustrate your answer while differentiating both the above types.
4. The following ledger balances have been extracted form Sunrise Bank Ltd. for the year ended on
December 31, 1999:
Particulars Rs.
Share Capital paid up 100,000 shares of Rs. 100 each 10,000,000
Reserve Fund invested in Government Bonds 5,000,000
Current Accounts 151,221,100
Deposit Accounts t 34,601,150
Acceptance for customers 7,714,100
Endorsements and Guarantees 370,100
Cash 1,132,700
Cash with State Bank of Pakistan 10,060,500
Owing by foreign correspondents 1,002,200
Short Term Loans . . 32,410,300
Investments 44,412,700
Additional information:
The Profit and Loss Account Balance is the balance left on that account after the payment of interim
dividend amounting to Rs. 1,000,000.
1. Debts considered good in respect of which the bank is fully secured Rs. 8,084,200.
2. Debts considered good secured by the personal liability of one or more parties as under:
(a) Bills discounted Rs.3 1,141,200
(b) Debts due on demand, Cash Credits,
Temporary overdrafts and personal security Rs. 77,283,500
(c) Debts owing by foreign correspondents,
Considered good Rs. 1,002,200
Required:
Prepare a profit and loss account and balance sheet as at December 31, 1999 as per requirements of the
Banking Companies Ordinance, 1962.
5. Illustrate various ratios pertinent to the analysis of the following:
(a) Stock Market Evaluation (list at least three with models and illustrations)
(b) Bankers - for long term loans (list at least four with models and illustrations).
6. The following multiple choice questions are available. Give correct answer in your answer book in the
following suggested format:
Correct Answer
(2) Funds Flow Statement and sources and application statement are:’
(5) In Insurance, the following Profit and Loss Accounts are prepared:
(a) ______VC_______
FC- TR TC
(b) FC
I- VC TR
(a) Independently
(b) Depending on production capacity
(c) Based on Sales forecasts of market.
(12) Consolidation of subsidiary accounts in the balance sheet of a unlisted Holding company is at present
in Pakistan:
(a) Compulsory (b) Voluntary (c) Required.
(13) Retained earning is synonymous to:
(a) Accumulated profit and loss account
(b) Profit for the year
(c) None of these.
(14) The requirements of an audit report for a Banking Company in Pakistan is under:
(18) Every limited Company in Pakistan is required by law to include the following along with financial
reports:
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