ALL UNIVERSITIES AND SERVICE COMMISSIONS PAST PAPERS IN PAKISTAN: Re: ::: vuaskari.com ::: MTH302 Assignment No. Idea Solution by Asad Munir

Saturday, April 7, 2012

Re: ::: vuaskari.com ::: MTH302 Assignment No. Idea Solution by Asad Munir

here is your Answer, read it very very carefully it is understood in This Question if they are not given.
Provident fund is a type of saving which the employees and the employees and the employer must remit into the fund with the objective of serving as guarantee and welfare benefits for the employees after retirement. According to local laws, a company can establish a Provident Trust Fund for the benefit of the employees. By law, 1/11th of Basic Salary per month is deducted by the company from the gross earnings of the employee. An equal amount, i.e 1/11th of basic salary per month, is contributed by the company to the Provident Fund to the account of the employee. Thus there is an investment of 2/11th of basic salary on behalf of the employee in Provident Fund. The company can invest the savings in Provident Fund in Government Approved securities such as defense saving Certificates. Interest earned on investments in Provident Fund is credited to the account of the employees in proportion to their share in the Provident Fund. Gratuity is a part of allowance. It is a benefit which an organization gives to his worker. Gratuity means the one basic salary after 11 month of a year given to a worker. But every year that amount credit into the Gratuity Trust Fund of that organization on the behalf of that person. Every year that amount added into the Gratuity trust Fund. Company invests that money into different resources. The profit earned from that amount is also added into the worker's gratuity account. A person received that amount when he left his job or at the time of retirement. Its Formula is very simple Company contribution to Gratuity Fund = 1/11 of basic salary = (1/11) x Basic salary

On Sat, Apr 7, 2012 at 3:44 PM, mc120203246 Syed Zahid-Ul-Hassan <mc120203246@vu.edu.pk> wrote:

Dear Asad,

Please Explain, Why Provident & Gratuity funds are mentioned in your solution, where in assignment Funds had not been asked.
Total Allowance is 65% which is more then 50, shouldn't we deduct 15% allowance & add back to company as tax.

Your reply will be appreciated.

Thanks

Regards.

On Sat, Apr 7, 2012 at 8:44 AM, Asad Munir <mc090402550@gmail.com> wrote:

Question No. 1
Basic Salary = 16,000
House Rent Allowance = 16,000 x .45 = 7200
Conveyance Allowance = 16,000 x .10 = 1600
Utilities Allowance = 16,000 x .10 = 1600
Total Allowances = 7200+1600+1600= 10,400

Provident Fund = 16,000 x 1/11 = 1455
Gratuity Fund = 16,000 x 1/11 = 1455

Earned Leave = (26,400 x 12)x{(24/(22x12)} = 28,800
Casual Leave = (26,400 x 12)x{(24/(22x12)} = 14,400
Misc. Social Charges = 16,000 x .065 = 1040

Gross Salary = 16,000+10,400+1455+1455+28,800+14,400+1040=73,550

Question No. 2

Discount Factor = (1-1/(1+i)^n)/i
Discount Factor = (1-1/(1+.05)^20)/.05
Discount Factor = 12.4622

Discounted Value = 20,000 x 12.4622 = 249,244

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