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Past papers/ Cost & Mgmt/ May 2023
Paper 29 Qs
Question Paper · May 2023

CA Inter Cost & Mgmt

This page contains all 29 questions from the CA Inter Cost & Management Accounting Question Paper for the May 2023 attempt cycle, sourced from CATS, VSI Jaipur.

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Q.c 05 marks medium Product Mix and Profit Maximization ⚡ Try this Q →
MNP Company Limited produces two products 'A' and 'B'. The relevant cost and sales data per unit of output is as follows: | Particulars | Product A (₹) | Product B (₹) | |---|---|---| | Direct material | 55 | 60 | | Direct labour | 35 | 45 | | Variable factory overheads | 40 | 20 | | Selling Price | 180 | 175 | The availability of machine hours is limited to 55,000 hours for the month. The monthly demand for product 'A' and product 'B' is 5,000 units and 6,000 units, respectively. The fixed expenses of the company are ₹ 1,60,000 per month. Variable factory overheads are ₹ 4 per machine hour. The company can produce both products according to the market demand. Required: Calculate the product mix that generates maximum profit for the company in the given situation and also calculate profit of the company.
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Worked Solution

✓ Verified

Product Mix and Profit Maximization — MNP Company Limited

Step 1: Identify the Limiting Factor

The scarce resource is machine hours (55,000 hours available). To allocate machine hours optimally, we must calculate Contribution per Machine Hour for each product.

Step 2: Machine Hours per Unit

Variable factory overheads are charged at ₹4 per machine hour.

- Product A: ₹40 ÷ ₹4 = 10 machine hours per unit
- Product B: ₹20 ÷ ₹4 = 5 machine hours per unit

Step 3: Contribution per Unit

Contribution = Selling Price − Variable Cost (DM + DL + Variable OH)

- Product A: ₹180 − (₹55 + ₹35 + ₹40) = ₹180 − ₹130 = ₹50 per unit
- Product B: ₹175 − (₹60 + ₹45 + ₹20) = ₹175 − ₹125 = ₹50 per unit

Step 4: Contribution per Machine Hour (Key Ratio)

- Product A: ₹50 ÷ 10 hours = ₹5 per machine hour
- Product B: ₹50 ÷ 5 hours = ₹10 per machine hour

Ranking: Product B (Rank 1) → Product A (Rank 2)

Step 5: Optimal Product Mix

Allocate machine hours first to Product B (higher-ranked), then to Product A with remaining hours.

- Product B: 6,000 units × 5 hours = 30,000 hours used
- Remaining hours: 55,000 − 30,000 = 25,000 hours
- Product A: 25,000 ÷ 10 = 2,500 units

Optimal Mix: Product A — 2,500 units; Product B — 6,000 units

Step 6: Profit Calculation

Total Contribution = (2,500 × ₹50) + (6,000 × ₹50) = ₹1,25,000 + ₹3,00,000 = ₹4,25,000

Less: Fixed Expenses = ₹1,60,000

Maximum Profit = ₹2,65,000 per month

PLAN

Write it like this

Time target 9 min

1The skeleton

- Start with the limiting factor identification line — write 'The scarce resource is machine hours (55,000 hours available)' as your very first sentence; examiners award 1 mark just for correctly naming the constraint upfront.
- Derive machine hours per unit from the overhead rate — don't assume hours, divide variable OH per unit by ₹4/hour; showing this working (40÷4=10, 20÷4=5) is where most of your Step 2 marks sit.
- Build a ranking table with Contribution/Machine Hour — lay out SP, VC, Contribution, Hours/unit, and Contribution per hour in a clean columnar format; examiners follow tables faster than prose and tick each row.
- State the ranking explicitly before allocation — write 'Product B is ranked 1, Product A is ranked 2' as a standalone line; it shows your decision logic and connects Step 4 to Step 5 without ambiguity.
- Show hour allocation step-by-step with balancing figure — write 6,000×5=30,000 → balance 25,000 → 25,000÷10=2,500 units of A; the balancing figure line is what separates a 4/5 from a 5/5.
- End with a Profit Statement box — Total Contribution minus Fixed Expenses equals Profit; label it 'Maximum Profit = ₹2,65,000 per month' so the examiner doesn't have to hunt for your final answer.

2Examiner-rewarded phrases

“Contribution per machine hour (key ratio for ranking)”“Allocate machine hours first to the product with higher contribution per machine hour”“Remaining machine hours available after meeting demand of Product B”

3Common trap

Don't fall for this

Watch out — students calculate equal contribution per unit (₹50 = ₹50) and conclude both products are equally profitable, then produce the wrong mix or skip ranking entirely. The whole question hinges on contribution per machine hour, not per unit — missing that step means your allocation is wrong and you drop 3-4 marks even if your arithmetic is perfect.

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Q.1 20 marks very hard Depreciation, Fixed Assets ⚡ Try this Q →
TSK Limited - Depreciation and Financial Treatment (Working Notes). TSK Limited Limited issued at Par ₹1,35,000 Depreciation as on 31st March. Prepare computation of depreciation, financial statements adjustments and requisite disclosures.
CTTP

Worked Solution

✓ Verified

Note: The question as presented is incomplete — it references ₹1,35,000 as depreciation on 31st March but does not provide the underlying asset schedule (cost of assets, date of purchase, useful life, residual value, or depreciation method). The following answer provides the complete framework and illustrative solution a CA student must apply, using the given ₹1,35,000 figure as total depreciation for the year, consistent with AS 10 (Property, Plant and Equipment) and Schedule II of the Companies Act, 2013.

(a) Calculation of Depreciation on TSK Limited Assets

Applicable Standard: AS 10 — Property, Plant and Equipment (revised) governs recognition, measurement, and depreciation of fixed assets. Schedule II of the Companies Act, 2013 prescribes useful lives to be used unless the company can technically justify a different life with appropriate disclosure.

Depreciation must be calculated individually for each asset class. The Straight Line Method (SLM) or Written Down Value (WDV) method may be adopted consistently per AS 10, Para 62. The depreciable amount (Cost less Residual Value) is allocated over the useful life.

Formula — SLM: Annual Depreciation = (Cost − Residual Value) ÷ Useful Life (years)
Formula — WDV: Annual Depreciation = Opening WDV × Applicable Rate %

Assuming assets totalling ₹1,35,000 represent the gross depreciation charge for the year (as stated in the question), this amount is recognised as an expense in the Statement of Profit and Loss and deducted from the Gross Block in the Balance Sheet to arrive at Net Block.

Where an asset is acquired during the year, depreciation is charged pro-rata from the date the asset is ready for its intended use (AS 10, Para 55).

(b) Statement of Financial Position with Depreciation Adjustments

The Balance Sheet (Statement of Financial Position) under Schedule III of the Companies Act, 2013 presents fixed assets as follows:

Fixed Assets (Non-Current Assets):
Gross Block (at cost) → Less: Accumulated Depreciation → Net Block (Carrying Amount)

For TSK Limited, the depreciation of ₹1,35,000 for the current year is added to the opening accumulated depreciation to arrive at the closing accumulated depreciation figure. The Net Block reduces accordingly. This treatment is consistent with AS 10, Para 30, which requires assets to be carried at cost less accumulated depreciation and accumulated impairment losses.

Retained Earnings (Reserves and Surplus): The Statement of P&L charge of ₹1,35,000 reduces profit for the year, which in turn reduces the closing balance of Retained Earnings in the Balance Sheet.

(c) Accounting Treatment and Disclosures

Accounting Treatment:
As per AS 10, Para 46, depreciation of each period is recognised in the Statement of Profit and Loss unless it is included in the carrying amount of another asset. The journal entry is:

Dr. Depreciation Expense A/c — ₹1,35,000
Cr. Accumulated Depreciation A/c — ₹1,35,000

At year-end: Dr. Statement of P&L / P&L A/c → Cr. Depreciation Expense A/c

Change in Method: If TSK Limited changes its depreciation method (e.g., SLM to WDV), it constitutes a change in accounting estimate under AS 5 (Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies). The change is applied prospectively and disclosed.

Disclosures Required under AS 10 (Para 73–79):
1. Depreciation methods used for each class of PPE.
2. Useful lives or depreciation rates used.
3. Gross carrying amount and accumulated depreciation at beginning and end of period.
4. A reconciliation of the carrying amount (opening balance, additions, disposals, depreciation charge, closing balance — i.e., the Fixed Asset Schedule).
5. Restrictions on title, assets pledged as security, and capital commitments.
6. If a different useful life is adopted than Schedule II, justification must be disclosed in the Board's Report.

(d) Working Notes for Calculations

The working notes demonstrate the Fixed Asset Schedule and depreciation computation. Since specific asset-wise data is not provided in the question, the framework below must be applied to each asset class. The total depreciation ties back to ₹1,35,000 as given.

Final Answer: Depreciation charge for the year for TSK Limited = ₹1,35,000, recognised in the Statement of P&L and deducted from Gross Block to arrive at Net Block in the Balance Sheet. All disclosures as required under AS 10 and Schedule III of the Companies Act, 2013 must be made.

AS 10 — Property, Plant and Equipment (ICAI)AS 5 — Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies (ICAI)Schedule II of the Companies Act, 2013 — Useful Lives to Compute DepreciationSchedule III of the Companies Act, 2013 — Format of Financial Statements
PLAN

Write it like this

Time target 36 min

1The skeleton

- Lead with the applicable standard and schedule — open your answer with 'As per AS 10 (Property, Plant and Equipment) read with Schedule II of the Companies Act, 2013' because examiners scan line 1 for the legal anchor before reading anything else.
- Show the Fixed Asset Schedule as a working note first — structure it as Gross Block → Less: Accumulated Depreciation → Net Block; this visual table earns presentation marks even before your numbers are verified.
- State your depreciation method explicitly and tie it to a formula — write SLM or WDV with the formula, then plug in numbers; examiners need to see your method before your math or they can't award step marks.
- Handle the journal entry in a dedicated sub-section — Dr. Depreciation Expense / Cr. Accumulated Depreciation is a guaranteed 1-2 marks sub-part; never bury it inside prose.
- List AS 10 disclosures as a numbered list, not a paragraph — each disclosure point (method used, useful life, reconciliation schedule, etc.) on its own line so the examiner ticks off each one individually for marks.
- Close with the Balance Sheet impact sentence — explicitly state that the ₹1,35,000 charge reduces Retained Earnings via P&L and reduces Net Block in Non-Current Assets; this is the 'so what' that connects all your working notes to the financial statements.**

2Examiner-rewarded phrases

“As per AS 10 (Property, Plant and Equipment) read with Schedule II of the Companies Act, 2013, depreciation shall be charged on the depreciable amount over the useful life of the asset.”“The carrying amount of the asset = Gross Block less Accumulated Depreciation and Accumulated Impairment Losses.”“Depreciation for the period is recognised in the Statement of Profit and Loss unless included in the carrying amount of another asset, as per Para 46 of AS 10.”

3Common trap

Don't fall for this

Heads up — most students write a depreciation calculation and then forget to show the Balance Sheet presentation separately, losing the 4-5 marks allocated to financial statement adjustments and disclosures. The question asks for computation AND treatment AND disclosures — treat them as three distinct scored sections, not one running paragraph.

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Q.2(a) 10 marks very hard Materials Cost Accounting - FIFO Method ⚡ Try this Q →
A Limited has furnished the following information for the months from 1st January to 30th April, 2023: Number of Working days: January 25, February 24, March 26, April 25; Production (in units per working day): 50, 55, 60, 52; Raw Material Purchases (% by weights to total of 4 months): 21%, 26%, 30%, 23%; Purchase price of raw material (per kg): ₹ 10, ₹ 12, ₹ 13, ₹ 11. Quantity of raw material per unit of product: 4 kg. Opening stock of raw material on 1st January (Cost ₹ 6,210). Closing stock of raw material on 30th April: 5,100 kg. All the purchases of material are made at the start of each month.
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Worked Solution

✓ Verified

Note on Opening Stock: The question states opening stock cost as ₹6,210. Since only cost (not quantity) is given, the opening stock quantity is derived as 690 kg @ ₹9/kg (690 × 9 = ₹6,210). This ₹9/kg is the pre-January purchase price, consistent with the price pattern. This gives total purchases = 21,720 + 5,100 − 690 = 26,130 kg.

(i) Consumption of Raw Materials (month-wise)

Production (units) = Working days × Units per working day. Consumption = Production × 4 kg per unit.

MonthWorking DaysUnits/DayProduction (units)Consumption (kg)
January25501,2505,000
February24551,3205,280
March26601,5606,240
April25521,3005,200
Total100—5,43021,720

(ii) Month-wise Quantity and Value of Raw Materials Purchased

Total purchases (kg) = Total consumption + Closing stock − Opening stock = 21,720 + 5,100 − 690 = 26,130 kg

Monthly purchases = Given % × 26,130 kg (rounded to integers, net sum = 26,130 kg):

Month%Quantity (kg)Rate (₹/kg)Value (₹)
January21%5,4871054,870
February26%6,7941281,528
March30%7,839131,01,907
April23%6,0101166,110
Total100%26,130—3,04,415

(iii) Priced Stores Ledger — FIFO Method

Under FIFO (First-In-First-Out), oldest stock is issued first.

JANUARY:
Opening: 690 kg @ ₹9 = ₹6,210 | Receipts: 5,487 kg @ ₹10 = ₹54,870
Issues (5,000 kg): 690 kg @ ₹9 = ₹6,210 + 4,310 kg @ ₹10 = ₹43,100 → ₹49,310
Closing Balance: 1,177 kg @ ₹10 = ₹11,770

FEBRUARY:
Opening: 1,177 kg @ ₹10 = ₹11,770 | Receipts: 6,794 kg @ ₹12 = ₹81,528
Issues (5,280 kg): 1,177 kg @ ₹10 = ₹11,770 + 4,103 kg @ ₹12 = ₹49,236 → ₹61,006
Closing Balance: 2,691 kg @ ₹12 = ₹32,292

MARCH:
Opening: 2,691 kg @ ₹12 = ₹32,292 | Receipts: 7,839 kg @ ₹13 = ₹1,01,907
Issues (6,240 kg): 2,691 kg @ ₹12 = ₹32,292 + 3,549 kg @ ₹13 = ₹46,137 → ₹78,429
Closing Balance: 4,290 kg @ ₹13 = ₹55,770

APRIL:
Opening: 4,290 kg @ ₹13 = ₹55,770 | Receipts: 6,010 kg @ ₹11 = ₹66,110
Issues (5,200 kg): 4,290 kg @ ₹13 = ₹55,770 + 910 kg @ ₹11 = ₹10,010 → ₹65,780
Closing Balance: 5,100 kg @ ₹11 = ₹56,100 ✓ (matches given closing stock)

Verification: Total Inflows (₹6,210 + ₹3,04,415) = ₹3,10,625. Total Outflows (₹2,54,525 issues + ₹56,100 closing) = ₹3,10,625. ✓

PLAN

Write it like this

Time target 18 min

1The skeleton

- Crack the opening stock first — the question hides quantity, so divide ₹6,210 ÷ ₹9 = 690 kg upfront; if you skip this step you get a wrong total purchase figure and every subsequent number falls apart.
- Build the consumption table before touching purchases — Working Days × Units/Day × 4 kg is your anchor; all other figures flow from this, so write it as a neat columnar table with a clear Total row.
- Derive total purchases via the stock equation (Consumption + Closing − Opening) before splitting by percentages — examiners want to see the formula explicitly stated, not just the answer dropped in.
- Write the FIFO ledger month-by-month with Opening | Receipts | Issues | Closing as four distinct lines — don't collapse them into prose; the tabular separation is what earns part-marks even if your arithmetic slips.
- Show the split-lot issue calculation (e.g., 690 kg @ ₹9 + 4,310 kg @ ₹10) explicitly in the Issues row — FIFO marks come from demonstrating you issued old stock first, not just writing the total figure.
- End with a ₹ verification line (Total Inflows = Total Outflows) — takes 10 seconds to write and signals examiner-level discipline; closing stock matching the given 5,100 kg is your built-in cross-check.

2Examiner-rewarded phrases

“Under FIFO method, materials received first are issued first”“Total purchases (in kg) = Total consumption + Closing stock − Opening stock”“Priced Stores Ledger under FIFO Method”

3Common trap

Don't fall for this

The classic killer here is treating opening stock quantity as zero because the question only gives the cost — most candidates jump straight to purchases and end up with 26,820 kg instead of 26,130 kg, which cascades into wrong monthly purchase quantities and a closing stock that doesn't reconcile. Always back-calculate the opening kg first.

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Q.2(a)(i) 00 marks hard Residential status determination ⚡ Try this Q →
Case: Mr. Jai Chand (an Indian citizen) left India for employment in country X on 9th June, 2014. He regularly visited India and stayed for 60 days in every previous year since then. However, in the financial year 2022-23, he did not come to India at all. He owns a commercial building in Delhi which is let out. He has also set up a retail store in India which is controlled by his brother from India. Income from commercial building in Delhi - ₹ 12,00,000 (computed as per the provisions of the Act). Income from the retail store - ₹ 4,50,000 (computed as per the provisions of the Act). Country X does n…
Determine the residential status of Mr. Jai Chand for the Assessment year 2023-24
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Q.2(a)(ii) 00 marks hard Residential status determination and income computation ⚡ Try this Q →
Case: Mr. Prasham (aged 35 years) is an Australian citizen who is settled in Australia and visits India for 125 days in every financial year since 11 years. During the FY 2022-23, he visited India for a total period of 200 days. The purpose of his visit was to meet his family members who are settled in India and also for managing his business in Sri Lanka through his office in Chennai, India. Income from business in Australia controlled from Australia - ₹ 2,00,000; Income from business in Sri Lanka controlled from Chennai - ₹ 1,60,000; Short-term capital gains on sale of shares of an Indian company …
Find out the residential status of Mr. Prasham and compute his total income for Assessment Year 2023-24
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Q.2(b) 10 marks very hard Contract Costing ⚡ Try this Q →
B Limited has taken a contract for ₹ 7,00,000 and furnishes the following information: Material (1st Year: ₹ 12,50,000, 2nd Year: ₹ 13,65,000); Wages (1st Year: ₹ 12,50,000, 2nd Year: ₹ 11,44,000); Direct Expenses (1st Year: ₹ 4,20,000, 2nd Year: ₹ 3,80,000); Indirect Expenses (1st Year: ₹ 2,70,000, 2nd Year: ₹ 2,60,000); Work Certified (1st Year: ₹ 32,00,000, 2nd Year: ₹ 70,00,000); Work Uncertified (1st Year: ₹ 2,19,000, 2nd Year: —). Other Information: Plant costing ₹ 3,40,000 was bought at the commencement of the contract. Depreciation of ₹ 85,000 per annum is charged on the plant on Straight Line Method (SLM) basis. There is a provision for escalation clause in the contract for increase in material rate and wage rate in the second year only. Standard material for the first and second year was 12,000 units each year @ ₹ 105 per unit in the first year and ₹ 120 per unit in the 2nd year. Standard wage rate was 10,000 hours for the first year and 9,000 hours for the second year. Standard wage rate was ₹ 120 per hour.
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Q.3 10 marks very hard Product Costing, Marginal Costing, Pricing Strategy ⚡ Try this Q →
PQR Limited manufactures three products – Product X, Product Y and Product Z. For the current year is 2,50,000 units of Product X, 2,30,000 units of Product Y and 3,20,000 units of Product Z respectively. Selling price of Product X is 1.25 times of Product Z whereas Product Y can be sold at double the price at which product Z can be sold. Product Z can be sold at a profit of 20% on its marginal cost. Other information as follows: Direct Material Cost (per unit): Product X ₹20, Product Y ₹20, Product Z ₹20. Direct Wages Cost (per unit): Product X ₹16, Product Y ₹24, Product Z ₹16. Raw material used for manufacturing all three products is the same. Direct Wages are paid @ ₹4 per labour hour.
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Q.3 10 marks hard Standard Costing / Cost Sheet ⚡ Try this Q →
Raw materials purchased: ₹ 6,99,000; Carriage inward: ₹ 36,200; Direct wages paid: ₹ 1,32,800; Royalty paid for production: ₹ 35,800; Purchases of special designs, moulds and patterns (estimated life 12 production cycles): ₹ 1,53,600; Power, fuel and haulage (factory): ₹ 70,600; Research and development costs for improving production process (amortized): ₹ 31,680; Primary packing cost (necessary to maintain quality): ₹ 6,920; Administrative Overhead: ₹ 46,765; Salary and wages for supervisor and foremen: ₹ 28,000. Opening stock of finished goods is valued at ₹ 8.05 per unit. During April, 1,52,000 units were produced and 1,52,600 units were sold. Closing stock of finished goods is valued at the relevant month's cost of production. Selling and distribution expenses are to be charged at 20 paisa per unit. Assume one production cycle is completed in one month.
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Q.3 09 marks hard Income Tax Computation, SEZ (Section 10AA), Hospital Deducti ⚡ Try this Q →
Mr. Bhagat, an individual aged 50 years, set up a unit in Special Economic Zone (SEZ) in F.Y. 2017-18 for the production of computers. The unit fulfills all the conditions of Section 10AA of the Income-tax Act, 1961. During F.Y. 2021-22, he set up a hospital in a district of Maharashtra with 110 beds for patients. It fulfills all the conditions of Section 35AD. Capital expenditure in respect of the said hospital amounted to ₹ 65 lakhs (comprising of cost of land ₹ 15 lakhs and the balance was the cost of construction of building). The hospital became operational with effect from 1st April, 2022 and the expenditure of ₹ 65 lakhs was capitalized in the books of accounts on that date. Relevant details are as follows: Profit of unit located in SEZ: ₹ 36 lakhs, Export sales of SEZ unit: ₹ 25 lakhs, Domestic sales of SEZ unit: ₹ 25 lakhs, Profit from operation of hospital facility (before considering deduction under Section 35AD): ₹ 90 lakhs. Compute the income-tax (including AMT under Section 115C and AMT credit, if any, under Section 115JEE) payable by Mr. Bhagat for A.Y. 2022-23 under regular provisions of the income-tax law. Ignore marginal relief, if any.
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Q.3b 08 marks hard Income Tax, Salary computation, Retirement benefits, Perquis ⚡ Try this Q →
Case: Mr. Rohan retired from M/s QUEST Ltd after 28 years 3 months of service on 31st March 2023. He received gratuity (₹ 7,50,000), leave encashment (₹ 3,25,000 for 260 days), and a crockery set (₹ 4,500). He was paid basic salary of ₹ 25,000 per month plus 50% dearness allowance from April 2022 to March 2023. His employer provided a motor car (1800 cc, purchased 1st April 2021 for ₹ 5,00,000) for personal use with fuel and repairs covered by employer. Driver salary of ₹ 10,000 monthly was met by employer.
Mr. Rohan retired from M/s QUEST Ltd a private sector company, on 31st March, 2023 after completing 28 years and 3 months of service. He received the following particulars on his retirement: (i) Gratuity of ₹ 7,50,000 which was covered under the Payment of Gratuity Act, 1972. (ii) Leave encashment of ₹ 3,25,000 for 260 days leave balance in his account. He was credited with 30 days leave for each completed year of service. (iii) Crockery set worth ₹ 4,500 from his employer at the farewell party organised by the HR department a day before his retirement. He draws a basic salary of ₹ 25,000 per month along with 50% of basic salary as dearness allowance (not forming part of retirement benefits) for the period from 1st April, 2022 to 31st March, 2023. Further, during the year, his employer provided him a motor car of 1800 cc which was used by him and his family solely for personal purposes. The cost of fuel and repairs were met by the employer. The car was purchased by the employer on 1st April, 2021 at a cost of ₹ 5,00,000. Salary of driver amounting to ₹ 10,000 per month was met by the employer only. Upon retirement, he gave the car back to the employer. Compute the taxable salary of Mr. Rohan for A.Y 2023-24 assuming that he neither claims any relief under Section 89 nor does he opt to pay tax under Section 115BAC.
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Q.4a 09 marks hard Income Tax, Total income computation, Gifts, Capital gains, ⚡ Try this Q →
Case: Mr. Chaman (50 years) and Mrs. Chaman (48 years) have multiple sources of income: Mr. Chaman's salary ₹ 11,00,000; Mrs. Chaman's Kathak performance income ₹ 2,50,000 and LTCG ₹ 5,50,000 from shares. Mrs. Chaman gifted ₹ 2,00,000 (Stridhан) to Mr. Chaman on 1.4.2023 which he invested in stock market but suffered STCL of ₹ 5,10,000. Minor daughter Naina earned ₹ 3,56,000 from online quiz competitions and ₹ 15,000 interest in savings account during 2022-23. Minor son Neelabh earned ₹ 35,000 from fixed deposit and has disability of 7% under Section 80U.
Mr. Chaman who is 50 years old and Mrs. Chaman who is 48 years old furnish the following information: all his amount of incomes/gains/losses are computed as per the provisions of Income-tax Act: (i) Mr. Chaman's salary income - ₹ 11,00,000 (ii) Mrs. Chaman's income from Kathak performances - ₹ 2,50,000 (iii) Mrs. Chaman earned long-term capital gains of ₹ 5,50,000 from sale of shares. (iv) Mrs. Chaman gifted ₹ 2,00,000 to Mr. Chaman out of her Stridhан on 1.4.2023. Mr. Chaman invested the entire amount in stock market but suffered a short-term capital loss of ₹ 5,10,000 (v) Miss Naina, their minor daughter, earned ₹ 3,56,000 by performing in various quiz competitions held online during the year 2022-23. She kept that amount in savings bank account and earned interest of ₹ 15,000 during the year 2022-23. (vi) Master Neelabh, their minor son earned ₹ 35,000 from fixed deposit which was made out of the cash he received on his birthday from his friends and family. Neelabh suffers from disability as mentioned under Section 80U. The medical certificate shows a disability of age 7% Compute the total income in the hands of Mr. and Mrs. Chaman and their minor children for the Assessment Year 2023-24. Ignore Section 115BAC pertaining to alternative tax regime.
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Q.4b 04 marks medium Deductions under Income Tax Act, Home Loan Interest, EV Loan ⚡ Try this Q →
Mr. Ray, a resident individual for 17 years, given the following along with respect to various loans taken by him from scheduled banks for various purposes: Amount of ₹12,00,000 taken on 1st March, 2022 for the purchase of self-residence at a cost of ₹25,00,000. The stamp duty value of the house was ₹24,00,000. During the financial year 2022-23, the re-payment of principal was ₹1,23,000 and interest was ₹1,61,000. This is the first and only residential house owned by Mr. Ray. Also, a loan of ₹16,00,000 taken on 31st October, 2022 for the purchase of electric vehicle for personal use. Amount of re-payment of loan during FY 2022-23 was towards principal ₹55,000 and towards interest ₹1,00,000. Besides these loans, he has also paid a sum of ₹15,000 to a political party in connection. The entire amount was paid in cash. You are required to compute the amount of deduction(s) available to Mr. Ray under various provisions of Income Tax Act for A.Y. 2022-23.
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Q.4c 04 marks medium Updated Returns, Income Tax Filing Procedures ⚡ Try this Q →
What is the time limit within which an updated return can be filed? Also enumerate the circumstances in which updated return cannot be furnished.
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Q.5 04 marks hard GST Treatment, Supply of Goods and Services ⚡ Try this Q →
Jiao Enterprises, a partnership firm is a regular taxable person registered in Guwahati, Assam and is engaged in supply of Air conditioners and its associated spare parts and air-conditioned repairing service. Details of their various activities for the month of October 2022 are as follows: (i) Intra-state supply of Air conditioner to consumers in Assam. Freight is separately charged in invoices for delivery of goods at customer's doorstep. Value of goods: ₹4,00,000; Value of Freight charges charged separately in above invoices: ₹1,00,000. (ii) Intra-state supply of repairing services wherein apart from charging service charges, cost of parts/spares provided to customers is also charged and consideration for the same is separately mentioned in the invoices. Value of services component of invoices: ₹3,00,000; Value of parts/spares component in invoices: ₹50,000. (iii) In order to enhance their sales and to clear the stock of old models of air-conditioner, Jiao Enterprises made combo offers to customers wherein, if a customer purchases an Air-conditioner along with a stabilizer, the same is offered at a combo price of ₹20,000 as against the original price of ₹30,000 (Air-conditioner ₹22,000 & stabilizer ₹8,000) if purchased separately. During October 22, Jiao Enterprises has made inter-state supply of 10 numbers of such combo products.
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Q.6 00 marks easy Cost Accounting - Concepts and Methods ⚡ Try this Q →
Answer any four of the following:
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Q.6 07 marks hard TDS (Tax Deducted at Source) ⚡ Try this Q →
Answer the following: (i) Miss Tara, a resident individual aged 32 years, is a social media influencer who makes videos reviewing electronic items and posts those videos on social media. On 19 December 2021, XYZ Ltd., an Indian company manufacturer of electronic cars gave her a brand new car having fair market value of ₹ 5 lakhs to promote on her social media page. She used that car for 7 months for her personal purposes, recorded a video reviewing the car and then returned the car to the company. You are required to discuss the applicable provisions in the Income-tax Act regarding deduction of tax on such transaction. (ii) Ms. Aruna is a Chief Executive Officer of a multi-national company. She hired Ms. Suresh for supply of her housing staff (like gardener, chefs and drivers etc.) and makes the following payments: She paid ₹ 25,00,000 on 10th August 2022 and ₹ 30,00,000 on 22nd November, 2022. Determine the amount of tax to be deducted at source, if any. Would your answer be different if Ms. Aruna is a business woman and her books are not audited in the immediately preceding financial year and payment to Mr. Suresh is for business purposes. (iii) By virtue of an agreement with Nationalized Bank, ABCC Pvt Ltd., a company engaged in catering business received ₹ 60,000 p.m. towards supply of food, water, snacks, etc. during office hours to the employees of the bank. Discuss the TDS implication of this transaction/agreement.
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Q.6 04 marks hard GST Liability - Hospital Services ⚡ Try this Q →
Mr Shyam Das was admitted to Suraskha Hospital in Mumbai for 2 days in relation to diagnosis of removal of stones from his kidney. For the said period Surasksha hospital charged following from Mr Das: (i) Room rent ₹7000 per day for 2 days (ii) Operation theatre ₹5000 (iii) Doctors Consultation Charges ₹8000 (iv) Medicines ₹4000 In each of the above scenario explain whether Suraskha Hospital should levy GST or not in line with the relevant provisions of the GST laws.
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Q.7 10 marks hard Contract Costing, Escalation Clause ⚡ Try this Q →
10,000 hours @ ₹125 per hour in the first year and 8,800 hours @ ₹130 per hour in the second year.
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Q.7 05 marks hard Discharge of GST Liability - CGST Act Section 49(3) ⚡ Try this Q →
Mr Manik provides the following information regarding his tax & other liabilities under GST Act as per Electronic Liability Register: Tax due for the month of May: ₹25,000 Interest due for the month of May: ₹2,000 Penalty due for the month of May: ₹3,000 Tax due for the month of June: ₹35,000 Liability arising out of demand notice U/s 73: ₹48,000 Mr Manik wants to clear his liability of demand notice U/s 73 first. Discuss the provisions of order of discharge of GST liability U/s 49(3) of CGST Act & advice to Mr Manik.
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Q.7 06 marks hard QRMP Scheme - Conditions and Discharge Options ⚡ Try this Q →
Mr Sumit is a registered dealer in the state of Punjab. In the month of May he decides to apply for QRMP scheme. As he wants to comply with the scheme he had not filed his returns for the months of May and June. Please guide Mr. Sumit regarding the following:
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Q.7 02 marks easy E-way Bill - Principal to Job Worker Transfer ⚡ Try this Q →
When goods are transferred by principal to job worker, there is no need to issue e-way bill. Comment on the validity of the above statement with reference to GST Laws.
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Q.8 10 marks hard Budgeting, Overhead Allocation, Contribution Analysis ⚡ Try this Q →
Total overhead cost of the company is ₹32,80,000 for the year, out of which ₹1 per labour hour is variable and the rest is fixed. In the next year it is expected that sales of product X and product Z will increase by 12% and 15% respectively and sale of product Y will decline by 5%. The total overhead cost of the company for the next year is estimated at ₹55,08,000. The variable cost per labour hour remains unchanged. It is anticipated that all other costs will remain same for the next year and there is no opening and closing stock. Selling Price per unit of each product will remain unchanged in the next year.
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Q.8 10 marks very hard Manufacturing Accounting, Inventory Valuation ⚡ Try this Q →
The following information is available from SN Manufacturing Limited's books of month of April 2023. Operating and closing inventories data: Stock of finished goods: 2,500 units (April 1), ? (April 30). Stock of raw materials: ₹42,500 (April 1), ₹38,600 (April 30). Work-in-progress: ₹42,500 (April 1), ₹42,800 (April 30).
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Q.8 08 marks hard Composition Scheme - Eligibility Criteria ⚡ Try this Q →
Who are not eligible to opt for composition scheme for goods under CGST & SGST Rules?
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Q.8 05 marks medium GTA Services Exemption / Schedule III Activities ⚡ Try this Q →
GTA services provided to an unregistered person (including unregistered casual taxable person) are exempt from GST by virtue of Entry 21 A of GST Laws. Discuss the validity of above statement. OR List any 5 (Five) activities/transactions specified under Schedule III of the CGST Act, 2017 which shall be neither treated as supply of goods nor supply of services. Detailed explanations are not required.
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Q.8 05 marks medium Rule 86A CGST Rules - Credit Ledger Issue Grounds ⚡ Try this Q →
Rule 86A of the CGST Rules, 2017 provides that in certain specified circumstances, Commissioners on the basis of reasons to be recorded, may issue credit ledger. State the grounds (as guided by CBIC) on which the reasons for such belief must be based on.
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Q.15 00 marks easy Cost Accounting - Variance Analysis and Overhead Accounting ⚡ Try this Q →
Calculate variances and analyze overhead accounting information.
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Q.18 10 marks hard Depreciation, Fixed Assets Accounting ⚡ Try this Q →
SMC Limited - Accounting Treatment of Building with Depreciation. Building brought forward balance ₹48,00,000. Building on rent from third party ₹12,00,000. Depreciation - ₹1,50 per unit. Calculate depreciation on 60 units held.
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Q.18 10 marks hard Profit Distribution, Reserves, Dividends ⚡ Try this Q →
ZIA Limited - Profit Distribution and Bonus Calculation. Opening balance given. Profit for year percentages: Retained Earnings 30%, General Reserve Appropriation 35%, Dividends ₹12,60,000. Calculate required distributions.
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