Management Accounting |
| Time: 3 hours |
March -2005 |
Marks: 100 |
|
| |
| Q.1. |
Brijesh started business by introducing capital
of Rs. 1,00,000 on 1-4-2004. He has taken Term Loan
from Bank of India of Rs. 4,00,000 at 12% interest
& purchased premises of Rs. 3,00,000 & Furniture & Equipment of
Rs. 1,50,000. His projected Trading & Profit & Loss Account for the
first year ended 31st March, 2005 is as follows :- |
|
| |
| |
Rs. |
Rs. |
|
Rs. |
Rs. |
| To Opening Stock |
|
-- |
By Sales |
|
|
| To Purchases |
|
|
Cash
Sales |
1,70,000 |
|
| Cash
Purchases |
50,000 |
|
Credit Sales |
8,50,000 |
|
| Credit
Purchases |
6,50,000 |
|
|
10,20,000 |
|
| |
7,00,000 |
|
Less : Returns |
20,000 |
10,00,000 |
| Less : Returns |
10,000 |
6,90,000 |
By Closing Stock |
|
50,000 |
| To wages |
|
60,000 |
|
|
|
| To Gross Profit c/d. |
|
3,00,000 |
|
|
|
| |
|
10,50,000 |
|
|
10,50,000 |
| To Administrative Expenses |
|
60,000 |
By Gross Profit b/d |
|
3,00,000 |
| To Selling Expenses |
|
1,00,000 |
By Profit on sale of Equipment |
|
5,000 |
| To Interest on Bank Loan |
|
48,000 |
(Cost of Equipment sold Rs. 20,000) |
|
|
| To Depreciation on Equipment |
|
30,000 |
|
|
|
| To Net Profit |
|
67,000 |
|
|
|
| Total |
|
3,05,000 |
Total |
|
3,05,000 |
Prepare
Cash Flow Statement for the year ended 31st March, 2005 as per
AS-3 & calculate cash & Bank Balance as on that date. Use Indirect
Method. Balances on 31st March, 2005 expected are Debtors Rs. 1,50,000. Creditors Rs. 50,000. Last
quarter Interest on Bank loan is not yet paid. Reconcile
your answer by preparing projected Balance Sheet (in vertical form) as at 31st March, 2005. |
|
| |
|
|
| Q.2. |
The Balance Sheets of Chetan Ltd. as at 31st March, 2003 & 2004. |
16 |
| |
| |
31-3-2003 Rs. |
31-3-2004 Rs. |
| Equity
Share Capital (shares
of Rs. 10 each fully called) |
10,00,000 |
14,50,000 |
| Less: Calls-in-Arrears (Rs. 2 per
share) |
5,000 |
-- |
| |
9,95,000 |
14,50,000 |
| Add: Share Forfeiture Balance (Rs.
8 per share) |
8,000 |
1,600 |
| Paid
up Equity Capital |
10,03,000 |
14,51,600 |
| 8%
Redeemable Preference Share Capital |
5,00,000 |
4,00,000 |
| Securities
Premium |
1,00,000 |
40,000 |
| Capital
Reserve (Net profit on Forfeited Shares reissued) |
-- |
16,500 |
| General
Reserves |
2,47,000 |
3,49,000 |
| Profit
& Loss Account |
1,50,000 |
7,42,900 |
| Loans |
5,00,000 |
10,00,000 |
| |
25,00,000 |
40,00,000 |
| Fixed
Assets (At cost Less Dep.) |
12,00,000 |
20,00,000 |
| Investments |
3,00,000 |
4,00,000 |
| Working
Capital |
10,00,000 |
16,00,000 |
| |
25,00,000 |
40,00,000 |
|
|
| |
Other
Information :- |
|
| |
(1) During the year Equity
shares on which calls were in arrears have been forfeited. |
|
| |
(2) Part of the forfeited
shares have been reissued at Rs. 7 per share. |
|
| |
(3) Bonus shares are
issued by using securities premium of Rs. 60,000 and General Reserve of Rs. 1,40,000. |
|
| |
(4) Depreciation
on Fixed Assets for the year was Rs. 1,80,000. |
|
| |
(5) Investments
costing Rs. 75,000 were sold at Rs. 1,00,000/ |
|
| |
Prepare Fund Flow Statement for the year ended 31st March, 2004. |
|
| |
|
|
| Q.3. |
From the following information, you are required
to prepare a Balance-Sheet in Horizontal form : |
16 |
| |
| Current
Ratio |
1.75 |
| Liquid
Ratio |
1.25 |
| Stock
Turnover Ratio |
9
times (Based on Closing Stock) |
| Gross
Profit Ratio |
25% |
| Debtors
collection period |
1.5
months |
| Reserves
and surplus to share capital |
0.2 |
| Cost
of Goods sold to Fixed Assets |
1.2 |
| Capital
Gearing (Long term Loans to Share Capital) |
0.6 |
| Fixed
Assets to shareholders Funds |
1.25 |
| Sales
for the year (All are on Credit Basis) |
Rs.
12,00,000 |
Current
Assets consisted of Cash, Stock & Debtors only. The company has not
issued pref. shares. There are no Bank Overdraft & Fictitious Assets. |
|
| |
|
|
| Q.4. |
Maza
Ltd. was formed and incorporated on 1st April, 2002. You are given
following trial balance as on 31st March, 2003 & 31st March, 2004. You are required to prepare vertical statement for both the
years in columnar form. |
16 |
| |
| |
31st March, 2003 |
31st March, 2004 |
| |
Dr. (Rs.) |
Cr. (Rs.) |
Dr. (Rs.) |
Cr. (Rs.) |
| Land
and Building |
25,50,000 |
-- |
25,50,000 |
-- |
| Machinery |
5,50,000 |
-- |
8,00,000 |
-- |
| Furniture |
2,00,000 |
-- |
3,00,000 |
-- |
| Sundry
Debtors |
3,00,000 |
-- |
5,00,000 |
-- |
| Cash
& Bank Balance |
1,00,000 |
-- |
1,00,000 |
-- |
| Sundry
Creditors |
-- |
2,00,000 |
-- |
3,00,000 |
| Outstanding
Expenses |
-- |
20,000 |
-- |
20,000 |
| Sales |
-- |
20,00,000 |
-- |
30,00,000 |
| Purchases |
12,00,000 |
-- |
15,00,000 |
-- |
| Opening
Stock |
-- |
-- |
3,00,000 |
-- |
| Admin.
Expenses |
2,76,000 |
-- |
3,70,000 |
-- |
| P/L
Opening Bal. |
-- |
-- |
-- |
7,44,000 |
| Selling
Expenses |
80,000 |
-- |
1,10,000 |
-- |
| Share
Capital |
-- |
20,00,000 |
-- |
20,00,000 |
| Unsecured
Loan |
-- |
10,36,000 |
-- |
4,66,000 |
| |
52,56,000 |
52,56,000 |
65,30,000 |
65,30,000 |
|
|
| |
Adjustment : (1) Closing Stock as on 31st March,
2004 is Rs. 4,00,000. |
|
| |
|
|
| Q.5. |
a) Horizon Ltd. engaged in the following transactions.
Identify whether it is
(a) an Operating (b) an Investing (c) a Financing (d) none of the above. |
5 |
| |
(1) Dividend paid. (2) Interest paid. (3) Issued long term bonds. (4) Purchased long term investment. (5) Equipment sold. (6) Dividend received on shares held. (7) Purchased land. (8) Received cash from customers. (9) Wages paid to workers. (10) Issued bonus shares out of general reserves. |
|
| |
b) Given below are some of the information of Parekar Ltd. as on 31st March, 2004.
| |
Rs. |
| Debtors |
30,000 |
| Outstanding
Manufacturing Exp. |
17,000 |
| Cash
Balance |
23,000 |
| Bills
Payable & Creditors |
38,000 |
| Machinery
(Imported) |
30,000 |
| Income
earned but not received |
6,000 |
| Bank
Overdraft |
15,000 |
| Bills
Receivable |
7,000 |
| Prepaid
traveling expenses |
4,000 |
Using
above data calculate current ratio and liquid ratio and comment on it. |
6 |
| |
c) Calculate Return on Capital
employed and Return on Proprietor’s Fund from following information.
| |
Rs. |
| Equity
Capital |
3,00,000 |
| General
Reserves |
4,00,000 |
| Profit
& Loss A/c |
1,50,000
(Cr.) |
| Sundry
creditors |
2,00,000 |
| Operating
Profit |
3,50,000
(Before Interest & Tax) |
| Long
Term Loan |
2,00,000
(at 12% p.a. Interest) |
| Tax
Rate is 30%. |
|
5 |
| |
|
|
| Q.6. |
Chinmag is carrying on trading business in
India
and
gives the following information. (1) Estimated sales in year Rs. 12,00,000. (2) His Administrative & Selling expenses
are estimated as fixed expenses Rs. 2,000 per month and variable expenses
equal to 5% of his turnover. (3) He expects to fix sale price for each
product which will be 25% in excess of his cost of purchase. (4) He expects to turnover his stock four
times in the year. (5) The sales & Purchases will be evenly
spread throughout the year. 20% of sales will be on cash and balance on
credit and allowed 2 months credit. He also expects one month credit from his
suppliers. (6) Cash Balance = Fixed and variable
expenses for one month. |
16 |
| |
Calculate
his average working capital and prepare his income statement for the year. |
|
| |
|
|
| Q.7. |
Vinod Honorable Ltd. presents you with their
summarized Profit & Loss A/c with the request to convert the same into a
common size statement in vertical form after incorporating the information
given there under & briefly comment on it. |
16 |
| |
Profit
and Loss Account for the year ended 31-12-2004 |
|
| |
| Particulars |
Rs. |
Particulars |
Rs. |
| To Opening Bal. B/d. |
1,00,000 |
By Sales |
10,00,000 |
| To Opening Stock : Raw
Material Finished goods |
2,00,000 1,50,000 |
By Dividend received |
2,00,000 |
| To Purchases : Raw
Material Finished goods |
3,50,000 60,000 |
By Closing Stock : Raw
Material Finished
goods |
2,00,000 3,00,000 |
| To Manufacturing Exp. |
1,00,000 |
|
|
| To Establishment Exp. |
2,82,000 |
|
|
| To Interim Dividend |
35,000 |
|
|
| To Provision for Tax |
75,000 |
|
|
| To Audit fees |
2,500 |
|
|
| To Directors Fees |
2,000 |
|
|
| To Preliminary Expenses |
5,000 |
|
|
| To Salaries & Wages |
1,00,000 |
|
|
| To Depreciation on : Delivery Van Building for Office |
1,000 1,500 |
|
|
| To Int. on Secured Loan |
10,000 |
|
|
| To Selling & Distribution Exp. |
75,000 |
|
|
| To Loss on Sales of Fixed Assets |
10,000 |
|
|
| To Transfer to General Reserve |
10,000 |
|
|
| To Proposed Dividend |
55,000 |
|
|
| To Balance c/d |
76,000 |
|
|
| |
17,00,000 |
|
17,00,000 |
|
|
| |
Other
Information : Establishment expenses include a sum of Rs. 12,000
written-off as bad debts. |
|
| |
|
|
| Q.8. |
Complete
the following comparative statement of Mahesh Pvt. Ltd. by ascertaining the
missing figures and underline the missing figures ascertained. |
16 |
| |
| Particulars |
2003
Rs. |
2004
Rs. |
Absolute Increase/Decrease Rs. |
Increase/Decrease % |
| Sales |
6,00,000 |
? |
+3,00,000 |
? |
| Cost
of Goods Sold : Opening
Stock |
? |
60,000 |
+10,000 |
? |
| Purchases |
4,00,000 |
? |
+80,000 |
? |
| Closing
Stock |
? |
? |
? |
? |
| Cost of Goods Sold |
? |
? |
+97,500 |
+25% |
| Gross
Profit |
? |
? |
? |
? |
| Operating Expenses |
|
|
|
|
| (a) Administrative
Exp. |
40,000 |
? |
? |
+100% |
| (b)
Financial Exp. |
60,000 |
72,000 |
? |
? |
| (c)
Selling Exp. |
? |
1,50,000 |
+1,00,000 |
+200% |
| Total
Operating Exp. |
? |
? |
? |
? |
| Net
Profit Before Tax |
60,000 |
1,10,500 |
? |
? |
| Provision
for Tax |
? |
? |
? |
? |
| Net
Profit after Tax |
36,000 |
? |
+27,000 |
+75% |
|
|
| |
|
|
| Q.9. |
Write
note on any four: |
16 |
| |
a) Liquid Assets. |
|
| |
b) Contingent Liabilities. |
|
| |
c) Cash Flow v/s Fund Flow. |
|
| |
d) Trading on equity. |
|
| |
e) Debtors Turnover Ratio &
Creditors Turnover Ratio. |
|
| |
f ) Selection of Accounting Software. |
|
|
