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Past papers/ Cost & Mgmt/ July 2021
Paper 26 Qs
Question Paper · July 2021

CA Inter Cost & Mgmt

This page contains all 26 questions from the CA Inter Cost & Management Accounting Question Paper for the July 2021 attempt cycle, sourced from VSI Jaipur, CATS.

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Q.a 06 marks medium GST – Input Tax Credit (ITC) ⚡ Try this Q →
A Ltd. procured the following goods in the month of December, 2020: (1) Goods used in constructing an additional floor of the building – GST ₹15,435 (2) Goods given as free sample to prospective customers – GST ₹15,000 (3) Trucks used for transportation of inputs in the factory – GST ₹11,000 (4) Inputs used in trial runs – GST ₹9,850 (5) Confectionery items for consumption of employees working in the factory – GST ₹3,250 (6) Cement used for making foundation and structural support to plant and machinery – GST ₹8,050 Compute the amount of ITC available with A Ltd. for the month of December 2020 by giving necessary explanations. Assume all other conditions necessary for availing ITC have been fulfilled.
CTTP

Worked Solution

✓ Verified

Computation of Input Tax Credit (ITC) available to A Ltd. for December 2020

The eligibility of ITC is governed by Section 16 read with Section 17(5) of the Central Goods and Services Tax Act, 2017 (CGST Act). Section 17(5) lists specific categories where ITC is blocked (ineligible). Each item is analysed below:

(1) Goods used in constructing an additional floor of the building – ₹15,435
As per Section 17(5)(d) of the CGST Act, 2017, ITC is blocked on goods received for construction of an immovable property on own account, even if used in the course of business. Construction of an additional floor of a building constitutes construction of immovable property. ITC is NOT available.

(2) Goods given as free sample to prospective customers – ₹15,000
As per Section 17(5)(h) of the CGST Act, 2017, ITC is blocked on goods disposed of by way of gifts or free samples. Free samples given to prospective customers fall squarely under this block. ITC is NOT available.

(3) Trucks used for transportation of inputs in the factory – ₹11,000
As per Section 17(5)(a) of the CGST Act, 2017, ITC on motor vehicles is blocked only for transportation of persons (seating capacity ≤ 13). However, the block expressly does not apply when motor vehicles are used for transportation of goods. Trucks used to transport inputs within the factory fall under transportation of goods. ITC IS available.

(4) Inputs used in trial runs – ₹9,850
Inputs used in trial runs are used in the course or furtherance of business (production testing). There is no specific block under Section 17(5) for such inputs. All conditions under Section 16(1) of the CGST Act, 2017 are assumed to be met. ITC IS available.

(5) Confectionery items for consumption of employees – ₹3,250
As per Section 17(5)(b)(i) of the CGST Act, 2017, ITC is blocked on food and beverages unless the inward and outward supply are of the same category or it is obligatory under any law for the employer to provide the same. Confectionery items are food and beverages. Neither exception applies here. ITC is NOT available.

(6) Cement used for foundation and structural support to plant and machinery – ₹8,050
Section 17(5)(d) blocks ITC on goods used for construction of immovable property (other than plant and machinery). The Explanation to Section 17(5) defines 'plant and machinery' to include the foundation and structural support of such machinery. Therefore, cement used for making foundation/structural support of plant and machinery is treated as part of plant and machinery — the block under Section 17(5)(d) does not apply. ITC IS available.

Total ITC available to A Ltd. for December 2020 = ₹28,900

Section 16 of the CGST Act 2017Section 17(5)(a) of the CGST Act 2017Section 17(5)(b)(i) of the CGST Act 2017Section 17(5)(d) of the CGST Act 2017Section 17(5)(h) of the CGST Act 2017Explanation to Section 17(5) of the CGST Act 2017 – definition of plant and machinery
PLAN

Write it like this

Time target 10 min 48 sec

1The skeleton

- Start each item with the section number, not the conclusion — write 'As per Section 17(5)(d)...' in line 1 of every item; examiners award structure marks before they even check your figure.
- Give a one-line reason tied to the statutory language — don't say 'it's blocked'; say 'construction of immovable property on own account' or 'disposed of by way of free samples' — mirror the Act's exact words for the reasoning mark.
- End every item with a bold verdict on its own line — 'ITC is NOT available' or 'ITC IS available' in caps/bold signals you've concluded clearly; examiners tick this fast.
- Nail item (6) by invoking the Explanation — cement for foundation of plant & machinery is the twist item worth 1 mark alone; explicitly write 'as per the Explanation to Section 17(5), foundation and structural support of plant and machinery is included within the definition of plant and machinery' — most students lose this mark.
- Close with a clean computation table showing only eligible items — list items (3), (4), (6) with amounts and total ₹28,900; a tabular summary signals exam readiness and protects you if your narrative has a slip.

2Examiner-rewarded phrases

“ITC is blocked under Section 17(5) of the CGST Act, 2017”“foundation and structural support to plant and machinery is included within the meaning of 'plant and machinery' as per the Explanation to Section 17(5)”“motor vehicles used for transportation of goods — the block under Section 17(5)(a) does not apply”

3Common trap

Don't fall for this

The cement item (6) is the biggest mark-loser — most students see 'cement for foundation' and instinctively block it under Section 17(5)(d) without reading the Explanation that explicitly carves out plant & machinery foundation. You'll flip ₹8,050 from blocked to available just by quoting that Explanation — don't skip it.

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Q.b 05 marks medium Income Computation and Carry Forward of Losses ⚡ Try this Q →
Mr. X a resident individual furnishes the following income information relevant to the previous year ending March 31, 2021-22: (i) Income from Salary (Computed): ₹ 2,22,000 (ii) Income from House Property: - House in Delhi - House in Chennai: ₹ 22,000 - House in Mumbai (self occupied): (₹) 2,60,000, (₹) 20,000 (iii) Profit and gains from business or profession: - Textile business: ₹ 18,000 - Cosmetics business: (₹) 22,000 - Speculative business-1: (₹) 74,000 - Speculative business-2: ₹ 46,000 (iv) Capital gains: - Short term capital gain from sale of property: (₹) 16,000 - Long term capital gain from sale of property: ₹ 15,400 (v) Income from other sources (Computed): - Income from betting: ₹ 34,000 - Income from Card games: ₹ 46,000 - Loss on maintenance of race horses: (₹) 14,600 Determine the gross total income of Mr. X for the assessment year 2021-22 and the losses to be carried forward assuming that he does not opt to be taxed under section 115 BAC.
CTTP

Worked Solution

✓ Verified

Gross Total Income: ₹3,05,400

Step 1: Income from Each Head

Income from Salary: ₹2,22,000 (as computed).

Income from House Property: House in Chennai yields ₹22,000. The loss of ₹2,60,000 on the self-occupied house in Mumbai is not allowed under Section 23(1) (no loss can be claimed on owner-occupied properties). Income from house property = ₹22,000.

Income from Business/Profession: Must be separated into speculative and non-speculative:
- Non-speculative: Textile business ₹18,000 + Cosmetics business loss ₹22,000 = Loss of ₹4,000
- Speculative: Speculative business-1 loss ₹74,000 + Speculative business-2 gain ₹46,000 = Loss of ₹28,000

Under Section 70, losses from one source within the business head can be set off against income from another source, but under Section 73, speculative business losses cannot be set off against non-speculative business income. Therefore: Non-speculative business yields a loss of ₹4,000 (eligible for set-off); speculative business yields a loss of ₹28,000 (cannot be set off against other income, must be carried forward).

Capital Gains: Short-term capital loss ₹16,000 and long-term capital gain ₹15,400. Under Section 73(2), short-term capital loss can be set off against long-term capital gain: ₹15,400 − ₹16,000 = Remaining STCL of ₹600 (carried forward).

Income from Other Sources: Betting ₹34,000 + Card games ₹46,000 − Loss from race horses ₹14,600 = ₹65,400.

Step 2: Set-off of Losses

Non-speculative business loss of ₹4,000 can be set off against any other income under Section 71(2). Set off against salary: ₹2,22,000 − ₹4,000 = ₹2,18,000.

Capital loss of ₹600 cannot be set off against income from other heads (restricted by Section 73 and 74) and is carried forward.

Gross Total Income = ₹2,18,000 + ₹22,000 + ₹65,400 = ₹3,05,400

Losses Carried Forward:
1. Speculative business loss: ₹28,000 — Carried forward for 4 years under Section 73(3).
2. Short-term capital loss: ₹600 — Carried forward for 8 years under Section 74(2).

Section 23(1) of the Income Tax Act 1961 (no loss on owner-occupied property)Section 70 of the Income Tax Act 1961 (set-off of losses within the business head)Section 71(2) of the Income Tax Act 1961 (inter-head set-off of business losses)Section 73 of the Income Tax Act 1961 (speculative business loss restrictions and carry-forward)Section 74 of the Income Tax Act 1961 (capital loss carry-forward)
PLAN

Write it like this

Time target 9 min

1The skeleton

- Segregate speculative from non-speculative business BEFORE you touch numbers — write two separate columns for PGBP right at the top; the examiner looks for this split first because it drives the entire set-off logic.
- Give each head its own mini-computation block — salary on one line, HP on one line, PGBP (two sub-blocks), CG, IOS — this lets the examiner award part marks even if your final GTI is wrong.
- Cite the section inline at the exact moment you apply the rule — don't save all section references for a footnote; write 'u/s 73, speculative loss cannot be set off against non-speculative income' right beside the figure where you're blocking the set-off.
- Show the intra-head (s.70) → inter-head (s.71) → carry forward (s.73/74) sequence explicitly — label each step; jumping straight to GTI without showing this ladder signals guesswork to the examiner.
- Close with a dedicated 'Losses Carried Forward' table listing loss type, amount, section, and years — this is where the last 1–2 marks live in a 5-mark question and most candidates either skip it entirely or forget to mention the number of years.

2Examiner-rewarded phrases

“speculative business loss cannot be set off against income from any source other than speculative business income”“the loss shall be carried forward for a period not exceeding 4 assessment years immediately succeeding the assessment year in which the loss was first computed”“loss from the activity of owning and maintaining race horses can be set off only against income from the same activity”

3Common trap

Don't fall for this

The single most dangerous move here is netting speculative and non-speculative business figures into one combined business loss — most students do this and lose 2 marks because s.73 mandates separate treatment and separate carry-forward rules. Also heads-up: race horse loss (₹14,600) cannot be set off against betting or card game income within IOS — it gets carried forward separately, and missing that distinction is the second mark that walks out the door.

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Q.c 04 marks medium Loss Return Filing Requirements ⚡ Try this Q →
Enumerate the cases where a return of loss has to be filed on or before the due date specified u/s 139(1) for carry forward of the losses. Also enumerate the cases where losses can be carried forward even though the return of loss has not been filed on or before the due date.
CTTP

Worked Solution

✓ Verified

Cases where loss return MUST be filed by the due date specified in Section 139(1) for carry forward of losses:

1. Loss from house property (Section 73) – Loss from house property can be carried forward for 8 consecutive years following the year in which it is incurred. Filing of return claiming such loss is mandatory by the due date specified in Section 139(1).

2. Loss from business or profession (Section 74) – Loss from business or profession can be carried forward for 8 years. However, the return must be filed by the statutory due date to claim the benefit of carry forward.

3. Loss from speculation business (Section 72) – Loss from speculation business can be carried forward for only 4 years, but the return must be filed by the due date to avail the benefit of carry forward.

4. Loss from long-term capital assets (Section 74A) – Loss from long-term capital assets can be carried forward for 8 years, contingent upon filing the return claiming the loss by the due date specified in Section 139(1).

Cases where losses can be carried forward even though the return of loss has NOT been filed by the due date:

1. Losses determined/allowed in assessment proceedings – Where the assessing officer, during assessment proceedings initiated under Section 143(1) or reassessment under Section 147, determines that losses exist and are allowable (whether claimed in the return or not, or even where no return was filed), such losses can be carried forward on the basis of the assessment order itself.

2. Losses arising where return filing was not mandatory – Where an assessee has no income or income below the exemption limit (and thus was not required to file a return) but has incurred losses in business or other sources, these losses can be carried forward based on the assessment order or notice compliance, even if the assessee did not file a return by the due date.

3. Losses determined in rectification proceedings (Section 154) – Losses corrected or determined in rectification proceedings under Section 154 can be carried forward even if the original return was not filed by the due date, based on the rectification order.

4. Losses carried forward in assessed returns filed during assessment – Where a return is filed during assessment proceedings (after the due date but forming part of the assessment record), and losses are determined therein, they can be carried forward on the authority of the assessment order.

Section 139(1) of the Income Tax Act, 1961Section 72 of the Income Tax Act, 1961 (Loss from speculation business)Section 73 of the Income Tax Act, 1961 (Loss from house property)Section 74 of the Income Tax Act, 1961 (Loss from business or profession)Section 74A of the Income Tax Act, 1961 (Loss from long-term capital assets)Section 143(1) of the Income Tax Act, 1961 (Assessment proceedings)Section 147 of the Income Tax Act, 1961 (Reassessment proceedings)Section 154 of the Income Tax Act, 1961 (Rectification of errors)
PLAN

Write it like this

Time target 7 min 12 sec

1The skeleton

- Split your answer into two clearly labelled parts before writing a single loss — write 'Part A – Return must be filed by due date u/s 139(1)' and 'Part B – Losses can be carried forward even without timely filing' as headers, because examiners allocate sub-marks by part and scan for the split in the first three lines.
- In Part A, lead each point with the section number, then the loss type — write 'u/s 72 – Business loss' not 'Business loss (Section 72)', because the examiner ticks the section number first and the label second, and burying it in brackets risks a missed tick.
- List only the four mandatory-timing losses in Part A — Business (s72), Speculation (s73), Capital Gains (s74), and House Property — resist the urge to add more because anything outside these four earns zero and eats your time.
- In Part B, anchor every point to the phrase 'determined during assessment proceedings' — this is the examiner's trigger phrase; write it verbatim in each sub-point because vague phrasing like 'AO allows it' looks like a guess and won't get full credit.
- End Part B with the 'income below exemption limit' exception — this is the high-value differentiator that separates a 3.5/4 from a 4/4, since most candidates forget this scenario entirely.

2Examiner-rewarded phrases

“return of loss has not been filed on or before the due date specified under section 139(1)”“losses determined in the course of assessment proceedings”“the assessee was not required to furnish a return of income under section 139(1)”

3Common trap

Don't fall for this

Heads up — most candidates flip the two parts or only write Part A (the mandatory list) and then add a one-liner for Part B, which loses 1-2 marks instantly because the question explicitly asks you to enumerate both categories with equal weight.

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Q.c 00 marks hard Return Filing Requirements ⚡ Try this Q →
In the following cases relating to F.Y.2020-21, the total income of the assessee as per the total income of any other person in respect of which he/she is assessable under Income Tax Act does not exceed the basic exemption limit. You are required to state with reasons, whether the assessee is still required to file the return of income or loss for A.Y. 2021-22 in each of the following independent situations:
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Q.d 00 marks easy Cost indifference analysis, Break-even point ⚡ Try this Q →
LR Ltd. is considering two alternative methods to manufacture a new product ready to market. The two methods have a maximum output of 50,000 units each and produce identical items with a selling price of ₹25 each. The costs are: Method-1 (Semi-Automatic): Variable cost per unit ₹15, Fixed costs ₹1,00,000. Method-2 (Fully-Automatic): Variable cost per unit ₹10, Fixed costs ₹3,00,000. You are required to calculate: (1) Cost Indifference Point in units. Interpret your results. (2) The Break-even Point of each method in terms of units.
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Q.1 14 marks very hard Income from Profession - Disallowances and Adjustments under ⚡ Try this Q →
Case: Mr. Ashish, a resident individual, aged 43 years, provides professional services in the field of interior decoration. Income and expenditure statement with detailed adjustments to be considered for income tax computation.
Mr. Ashish, a resident individual, aged 43 years, provides professional services in the field of interior decoration. His income & expenditure A/c for the year ended 31st March, 2021 is as under: Expenditure side: To Employees & Benefits ₹13,60,000, To Office & Administrative Fees ₹3,14,000, To General Expenses ₹75,000, To Electricity ₹63,000, To Medical Expenses ₹80,000, To Purchase of Furniture ₹48,000, To Depreciation ₹90,000, To Excess of income over exp. ₹39,43,000. Total ₹59,81,000 Income side: By Consultancy Charges ₹58,80,000, By Interest on Public Deposits (TDS) ₹17,000, Account ₹60,000, By Interest on Savings Bank Account ₹20,000, By Interest on National Savings Certificates VIII Issue (for 3rd year) ₹21,000. Total ₹59,81,000 The following other information relates to financial year 2020-21: (a) Family Planning expenditure of ₹20,000 incurred for the employees which was revenue in nature. The same was paid through account payee cheque. (b) Payment of salary of ₹25,000 per month to sister-in-law of Mr. Ashish, who was in-charge of the Accounts & Receivables department. However, in comparison to similar work profiles, the reasonable salary at market rates is ₹20,000 per month. (ii) Amount received by Mr. Ashish as Employees' Contribution to EPF for the month of February, 2021 + ₹10,000 was also deposited after he received the relevant Act refund to EPF. (iii) Medical Expenses of ₹80,000 as appearing in the Income & Expenditure A/c was expensed for the treatment of father of Mr. Ashish. His father was 75 years old and was not covered by any health insurance policy. The said payment of ₹80,000 was made through account payee cheque. (iv) General expenses as appearing in the Income & Expenditure A/c, includes a sum of ₹23,000 paid to Mr. Agarwal on 3rd January, 2021 as commission for securing work from new clients. This payment was made to her without deduction of tax at source. (v) Written down value of the depreciable assets as on 1st April, 2020 were as follows: Professional Books ₹90,000, Computers ₹15,000 As on 31st August, 2020 and was put to use on the same day. The payment was made under:
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Q.1 00 marks easy Income computation, section 115BAC, AMT, professional income ⚡ Try this Q →
Case: Mr. Ashish: (vi) Purchased a car on 02/04/2019 for ₹3,35,000 for personal use. On 30/04/2020 brought the car for use in his profession. Fair market value on 30/04/2020 was ₹2,50,000. Paid ₹19,000 by account payee cheque on 05/09/2020 as balance cost of new furniture and ₹1,000 in cash on 31/08/20 to transporter as freight charges for new furniture. (vii) Made a contribution of ₹1,00,000 in his PPF A/c on 31/01/2021. (ix) Gross Professional Receipts for P.Y. 2019-20 was ₹5,20,000.
Compute the total income and tax liability of Mr. Ashish for A.Y. 2021-22, assuming that he has not opted for payment of tax under section 115BAC. Ignore provisions relating to AMT and under section 14A relating to disallowance of expenditure incurred in relation to income not includible in total income.
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Q.2 10 marks hard Cost accounting, Cost sheet preparation ⚡ Try this Q →
The following data relates to manufacturing of a standard product during the month of March, 2021: Stock of Raw material as on 01-03-2021 ₹80,000. Work in Progress as on 01-03-2021 ₹50,000. Purchase of Raw material ₹2,00,000. Carriage Inwards ₹8,000. Direct Wages ₹1,20,000. Cost of special drawing ₹30,000. Hire charges paid for Plant ₹24,000. Return of Raw Material ₹40,000. Carriage on return ₹6,000. Expenses for participation in Industrial exhibition ₹8,000. Legal charges ₹2,500. Salary to office staff ₹25,000. Maintenance of office building ₹2,000. Depreciation on Delivery van ₹6,000. Warehousing charges ₹1,500. Stock of Raw material as on 31-03-2021 ₹30,000. Stock of Work in Progress as on 31-03-2021 ₹24,000. Additional Notes: Store overheads on materials are 10% of material consumed. Factory overheads are 20% of the Prime cost. 10% of the output was rejected and a sum of ₹5,000 was realized on sale of scrap. 10% of the finished product was found to be defective and the defective products were rectified at an additional expenditure which is equivalent to 20% of proportionate direct wages. The total output was 8000 units during the month. You are required to prepare a Cost Sheet for the above period showing the: (i) Cost of Raw Material consumed (ii) Prime Cost (iii) Work Cost (iv) Cost of Production (v) Cost of Sales
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Q.2(a) 06 marks hard Residential status determination, global income computation, ⚡ Try this Q →
Case: Mrs. Rohini, aged 62 years, was born and brought up in New Delhi. She got married in Russia in 1986 and settled there since then. Since her marriage, she visits India for 60 days each year during her summer break. Income details for P.Y. ended 31.03.2021: Pension received from Russian Government ₹65,000; Long-term capital gain on sale of land at New Delhi (computed) ₹3,00,000; Short-term capital gain on sale of shares of Indian listed companies in respect of which STT was paid both at the time of acquisition as well as at the time of redemption (computed) ₹60,000; Premium paid to Russian Life …
You are required to ascertain the residential status of Mrs. Rohini and compute her total income and tax liability in India for Assessment Year 2021-22.
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Q.2(b) 14 marks very hard Tax Deduction at Source (TDS), applicable sections and rates ⚡ Try this Q →
Examine whether TDS provisions would be attracted in the following cases, in respect of which section. Also specify the rate of TDS for each amount required to be deducted at source as applicable in each case. Assume that all payments are made to residents.
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Q.3(c) 10 marks very hard Cost accounting, P&L reconciliation ⚡ Try this Q →
The Profit and Loss account of ABC Ltd. for the year ended 31st March, 2021 is given below: To Direct Material ₹ 6,50,000 / By Sales ₹ 15,00,000 (15000 units); To Direct Wages ₹ 3,50,000 / By Dividend received ₹ 9,000; To Factory overheads ₹ 2,60,000 / blank; To Administrative overheads ₹ 1,05,000 / blank; To Selling overheads ₹ 85,000 / blank; To Loss on sale of investments ₹ 2,000 / blank; To Net Profit ₹ 57,000 / blank; Total ₹ 15,09,000 / ₹ 15,09,000. Notes: Factory overheads are 50% fixed and 50% variable. Administrative overheads are 100% fixed. Selling overheads are completely variable. Normal production capacity of ABC Ltd. is 20,000 units. Indirect Expenses are absorbed in the cost accounts on the basis of normal production capacity. Notional rent of own premises charged in Cost Accounts is amounting to ₹ 12,000. You are required to:
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Q.4 05 marks medium Total Income Computation, Minor's Income, Gifts, Scholarship ⚡ Try this Q →
Case: Mr. Dharmesh (45 years) and Mrs. Anandi (42 years) furnished the following income information: (i) Salary income (computed) of Mrs. Anandi ₹ 9,60,000; (ii) Income of minor Son 'A' who suffers from disability specified in Section 80 U ₹ 3,08,000; (iii) Income of minor daughter 'C' from script writing for Television Serials ₹ 1,86,000; (iv) Income from garment trading business of Mr. Dharmesh ₹ 17,50,000; (v) Cash gift received by minor daughter 'C' on 02-10-2020 from friend of Mrs. Anandi on winning of a story writing competition ₹ 45,000; (vi) Income of minor son 'B' from Scholarship received …
Compute the total income of Mr. Dharmesh and his wife Mrs. Anandi for Assessment Year 2021-22 assuming that they have not opted to be taxed under section 115BAC
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Q.4(a) 10 marks very hard Process Costing ⚡ Try this Q →
A Manufacturing unit manufactures product 'XYZ' which passes through three distinct Processes – X, Y and Z. Material consumed: Process X ₹2,600, Process Y ₹3,250; Direct wages: Process X ₹4,000, Process Y ₹3,500, Process Z ₹3,000. Total Production Overhead of ₹15,750 recovered @ 150% of Direct wages. 15,000 units at ₹2 each introduced to Process X. Output of each process passes to next process; 12,000 units transferred to Finished Stock from Process Z. No stock of materials or work in progress left at end. Wastage: Process X 6% (scrap value ₹1.10/unit), Process Y ?% (scrap value ₹2.00/unit), Process Z 5% (scrap value ₹1.00/unit). You are required to: (i) Find out the percentage of wastage in process Y, given that the output of Process Y is transferred to Process Z at ₹4 per unit. (ii) Prepare Process accounts for all three processes X, Y and Z.
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Q.5 10 marks hard Labour Cost Variances, Budget Preparation, Cost Accounting ⚡ Try this Q →
You are required to compute: (i) Total Labour Cost Variance (ii) Total Labour Rate Variance (iii) Total Labour Gang Variance (iv) Total Labour Yield Variance (v) Total Labour Idle Time Variance A company manufactures and sells a single product and estimated the following related information for the period November, 2020 to March, 2021: Opening Stock of Finished Goods and Sales (in Units), Selling Price per unit (in ₹): November 2020: 7,500 opening, 30,000 sales, ₹ 3; December 2020: 3,000 opening, 35,000 sales, ₹ 12; January 2021: 9,000 opening, 38,000 sales, ₹ 11; February 2021: 8,000 opening, 25,000 sales, ₹ 15; March 2021: 6,000 opening, 40,000 sales, ₹ 20 Additional Information: • Closing stock of finished goods at the end of March, 2021 is 10,000 units. • Each unit of finished output requires 2 kg of Raw Material 'A' and 3 kg of Raw Material 'B'. You are required to prepare the following budgets for the period November, 2020 to March, 2021 on monthly basis: (i) Sales Budget (in ₹) (ii) Production budget (in units) (iii) Raw material Budget for Raw material 'A' and 'B' separately (in units)
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Q.5 04 marks medium Capital Gains, Real Property Transfer, Stamp Valuation, Leas ⚡ Try this Q →
Case: Scenario (ii): Mr. A is the owner of a residential house purchased on 1st September, 2016 for ₹ 9,00,000. He sold the house on 4th September, 2020 for ₹ 19,00,000. Valuation as per stamp valuation authorities was ₹ 45,00,000. He invested ₹ 19,00,000 in NHAI Bonds on 21st March, 2021. F.Y. 2016-2017: 264, F.Y. 2020-2021: 30. Scenario (c): Mr. Patel is a proprietor of Star Stores since 2004-2018. He transferred his shop by way of lease to his son-in-law for ₹ 40 Lakh. Professional fees and brokerage ₹ 80,000. Balance Sheet as on 31-03-2021: Liabilities - Own Capital ₹ 10,50,000, Bank Loan ₹ 5,00…
Compute the capital gain for A.Y. 2021-22
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Q.5(a) 10 marks hard Labour Variances - Efficiency Variance and wage rate analysi ⚡ Try this Q →
The standard output of a Product 'DJ' is 25 units per hour in manufacturing department of a Company employing 100 workers. In a 40 hours week, the department produced 900 units of product 'DJ' despite 5% of the time paid was lost due to an abnormal reason. The hourly wage rates actually paid were ₹ 6.20, ₹ 6.30 and ₹ 6.40 respectively to Group 'A' consisting 10 workers, Group 'B' consisting 30 workers and Group 'C' consisting 60 workers. The standard wage rate per hour is same for all the workers. Labour Efficiency Variance is given ₹ 240 (T).
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Q.5(b) 05 marks hard Joint products, further processing decisions ⚡ Try this Q →
QFR Ltd. purchases crude vegetable oil. It does refining of the same. The refining process has six steps and four products at the split-off point. Products S, P and N can be individually further refined into one RM, PN and NL respectively. The joint cost of purchasing the crude vegetable oil and processing it were ₹ 40,000. Other details are as follows: Product S—Further processing costs ₹ 80,000, Sales at split-off ₹ 20,000, Sales after further processing ₹ 1,20,000; Product P—Further processing costs ₹ 32,000, Sales at split-off ₹ 12,000, Sales after further processing ₹ 40,000; Product N—Further processing costs ₹ 36,000, Sales at split-off ₹ 28,000, Sales after further processing ₹ 48,000; Product A—Further processing costs —, Sales at split-off ₹ 20,000, Sales after further processing —. You are required to identify the products which can be further processed for maximizing profits and make suitable suggestions.
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Q.5(c) 05 marks medium Employee turnover rates ⚡ Try this Q →
Following information is given of a newly setup organization for the year ended on 31st March, 2021. Number of workers replaced during the period: 50. Number of workers left and discharged during the period: 25. Average number of workers on the roll during the period: 500. You are required to:
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Q.6 20 marks very hard Cost Accounting - Responsibility Centres, CVP Analysis, Bonu ⚡ Try this Q →
Answer any four of the following:
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Q.7 05 marks medium Aggregate turnover, GST registration threshold ⚡ Try this Q →
P Ltd, a registered person provided following information for the month of October, 2020: | Particulars | Amount (₹) | |---|---| | Intrastate outward supply | 8,00,000 | | Interstate exempt outward supply | 4,00,000 | | Turnover of exported goods | 20,00,000 | | Payment of IGST | 1,20,000 | | Payment of CGST and SGST | 45,000 each | | Payment of custom duty on export | 40,000 | | Payment made for availing GTA services | 3,00,000 | GST is payable on Reverse Charge for GTA services. Explain the meaning of aggregate turnover as 2 (6) of CGST Act and compute the aggregate turnover of P Ltd. for the month of October, 2020. All amounts are exclusive of GST.
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Q.7(b) 10 marks very hard Activity-Based Costing ⚡ Try this Q →
PQR Ltd. is engaged in the production of three products P, Q and R. The company allocates Activity Cost Rates on the basis of Cost Driver capacity. Cost Drivers: Direct Labour hours (30,000 hours, ₹3,00,000), Production runs (600 runs, ₹1,80,000), Quality Inspections (8,000 inspections, ₹2,40,000). Activity/Products P, Q, R consumption data is provided. You are required to: (i) Calculate the cost allocated to each Product from each Activity. (ii) Calculate the cost of unused capacity for each Activity. (iii) A potential customer has approached for supply of 12,000 units of a new product 'S', to be delivered in lots of 1,500 units per quarter. Initial design cost: ₹30,000. Per quarter production: Direct Material ₹18,000, Direct Labour hours 1,500, Production runs 15, Quality Inspections 250. Prepare cost sheet segregating Direct and Indirect costs and compute the Sales value per quarter of product 'S' using ABC system considering a markup of 20% on cost.
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Q.9 05 marks medium Final return procedures and penalties ⚡ Try this Q →
Explain who is required to furnish final return, time limit for filing of final return and penalty for delay in filing final return.
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Q.9(b) 05 marks hard Cost Accounting - Activity-based costing and policy pricing ⚡ Try this Q →
MRSL Healthcare Ltd. has incurred the following expenditure during the last year for its newly launched 'COVID-19' insurance policy: [Table with costs for Office administration, Claims management, Employees cost, Postage and logistics, Policy issuance cost, Facilities cost, Cost of marketing of the policy, Policy development cost, Policy servicing cost, Sales support expenses, and I.T. Cost]. Number of Policy sold: 2,800. Total insured value of policies = ₹ 3,500 Crores. Cost per rupee of insured value = ₹ 0.002. You are required to: (i) Calculate Total Cost for 'COVID-19' Insurance policy segregating the costs into four main activities namely (a) Marketing and Sales support (b) Operations (c) I.T. Cost and (d) Support functions. (ii) Calculate Cost Per Policy.
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Q.10 05 marks hard GST registration threshold and liability ⚡ Try this Q →
Examine the following cases and explain with reasons whether the supplier of goods is liable to get registered in GST:
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Q.10(Alt) 05 marks medium GST Practitioners registration requirements ⚡ Try this Q →
Who can be registered as Goods and Service Tax Practitioners under Section 48 of the CGST Act?
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Q.10(c) 05 marks hard Accounting for Construction Contracts - Work Certified and C ⚡ Try this Q →
Brick Constructions Ltd. commenced a contract on April 1, 2020. The contract price is ₹ 10,00,000. The following details pertain to the Contract as on 31st March, 2021: The value of work completed up to Feb. 28, 2021 certified by the architect and as a matter of policy; the Contractor has retained ₹ 1,30,000 as retention money which is 20% of the certified work and paid the balance amount. The cost of work completed subsequent to the architect's certificate was of ₹ 30,000. The expenditure incurred related to material purchase, wages and other chargeable expenses were ₹ 5,10,000. Materials of the value of ₹ 30,000 were lying on the site. A special plant was purchased specifically for this contract at ₹ 40,000 and after use on this contract till 31st March, 2021; it was valued at ₹ 25,000. You are required to compute the value of Work Certified, Cash received for certified work and Notional profit of the contract for the year ended 31st March, 2021.
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