| Management Accounting |
| Time: 3 Hours |
October – 2003 |
Marks: 100 |
|
| |
| N.B.: |
(1) |
Question NO.1 is compulsory and carries 20 marks. |
|
| |
(2) |
Attempt any five questions from the remaining questions. |
|
| |
(3) |
Working notes should form part of your answer. |
|
| |
(4) |
Proper presentation and neatness is essential. |
|
| |
|
|
|
| Q.1. |
|
The Balance Sheets of Anil Ltd. as at 31st March, 2001 and 2002 are given below :
| Particulars |
31/03/2001Rs. In Lakhs |
31/03/2002Rs. In Lakhs |
| Sources of Funds : |
|
|
| Share Capital |
400 |
500 |
| Capital Reserve |
— |
20 |
| General Reserve |
180 |
210 |
| Profit & Loss A/c. |
70 |
90 |
| Debentures |
300 |
200 |
| Current Liabilities |
130 |
120 |
| Provision for Income Tax |
80 |
60 |
| Proposed Dividend |
40 |
50 |
| Total Rs. |
1200 |
1250 |
| Application of funds : |
|
|
| Fixed Assets : at cost |
1000 |
1000 |
| Less : Depreciation |
260 |
310 |
| |
740 |
690 |
| Investments |
110 |
90 |
| Current Assets |
320 |
450 |
| Preliminary Expenses |
30 |
20 |
| Total Rs. |
1200 |
1250 |
During the year ended 31st March 2002, the company:
| (a) |
Sold one machine for Rs. 40 lacs the cost of which was Rs. 80 lacs and the depreciation
provided on it was Rs. 30 lacs. |
| (b) |
Provided Rs. 100 lacs as depreciation. |
| (c) |
Redeemed the debentures at Rs. 105. |
| (d) |
Sold dome trade investments at a profit which was credited to capital reserve. |
| (e) |
Written off fixed assets (fully depreciation) costing Rs. 20 lacs. |
Prepare the Statement of Sources and Application of funds (Fund flow statement) for the year ended 31st March, 2002, showing the change in the working Capital. |
20 |
| |
|
|
|
| Q.2. |
|
| Liabilities |
2002 Rs. |
2001 Rs. |
Assets |
2002 Rs. |
2001 Rs. |
| Akhil's Capital |
1,75,000 |
1,00,000 |
Fixed Assets |
79,000 |
50,000 |
| General Reserve |
37,500 |
25,000 |
Stock |
1,12,500 |
75,000 |
| Loan From 'X' |
1,00,000 |
75,000 |
Debtors |
1,25,000 |
1,00,000 |
| Bank Loan |
12,500 |
25,000 |
Cash & Bank |
11 ,000 |
21,000 |
| Creditors |
40,000 |
30,000 |
Deferred Advertising |
12,500 |
14,000 |
| Outstanding Expenses |
12,500 |
20,000 |
Loan to 'K' |
37,500 |
15,000 |
| Rs. |
3,77,500 |
2,75,000 |
Rs. |
3,77,500 |
2,75,000 |
Following further information is available :
| (a) |
During the year ended 30th June, 2002, Mr. Akhil earned Net Profit of Rs. 85,000 after writing off Depreciation Rs. 9,000 but before transfer to General Reserve. |
| (b) |
Akhil was drawing Rs. 4,000 per month from his business for personal use. |
| (c) |
Fixed Assets of book value of Rs. 8,000 were sold at a profit of Rs. 2,000. |
| (d) |
Interest on loans paid to 'X' Rs. 15,000 and Interest on Loan received from 'K' Rs. 4,500/- |
You are required to prepare cash flow statement by Indirect method as per AS-3, for the year ended 30th June, 2002. |
16 |
| |
|
|
|
| Q.3. |
|
D.K. Ltd. provides the following information :
| (a) |
Projected Annual Material & Labour cost of the Co. is Rs. 7,20,000/- & Rs. 5,40,000/-respectively. |
| (b) |
Cost of Sales consists of Material, Labour and Overhead Cost only. |
| (c) |
Production and Sales take place evenly throughout the year. |
| (d) |
As per the credit policy of the Co. Debtors (at selling price) at three months credit will be Rs. 4,50,000/- However for working capital statement Investment in Debtors is to considered at cost. |
| (e) |
Raw Materials are in stock on an average for one month. |
| (f) |
Finished goods are in stock on an average for half a month. |
| (g) |
Credit allowed by suppliers is two months. |
| (h) |
Materials remain in process (valued at cost of Raw Material plus 50% of Labour and Overheads) on an average for one month. |
| (i) |
Company sales goods at 25% profit on cost. |
| (j) |
Time lag in payment of wages and overheads is one month. |
| (k) |
Cash balance to be maintained at Rs. 1,10,000. |
You are required to prepare a statement showing the Working Capital Requirement. |
16 |
| |
|
|
|
| Q.4. |
|
You are required to complete the following Balance-Sheet as at 31st October, 2002 of Net Set
Ltd.
| Liabilities |
Rs. (in Lakhs) |
Assets |
Rs. (in Lakhs) |
| Share Capital |
10 |
Fixed Assets |
15 |
| Reserves & Surplus |
? |
Current Assets : |
|
| Loans |
1 |
Stock ? |
|
| Current Liabilities |
? |
Debtors ? |
|
| |
|
Cash ? |
? |
| Rs. |
? |
Rs. |
? |
Ratios of the company are :-
| (i) |
Reserve & Surplus to share Capital Ratio 1:1 |
| (ii) |
Sales to Net worth Ratio 1.5:1 |
| (iii) |
Sales to Debtors Ratio 6:1 |
| (iv) |
Gross Profit Ratio 20% on sales |
| (v) |
Net working Capital Rs. 6 lakhs |
| (vi) |
Stock Turnover Ratio 6 times |
| (vii) |
Current Ratio 2.5:1 |
| (viii) |
Acid Test Ratio 1.5:1 |
Net worth means total of share capital and Reserves and surplus. |
16 |
| |
|
|
|
| Q.5. |
a) |
Following is the Profit and Loss Account of Saurav-balanced Limited for the year ended 31st March, 2002. You are required to prepare Vertical Income statement for the purpose of analysis.
| Particulars |
Rs. In Lacs |
Particulars |
Rs. In Lacs |
| To Opening Stock |
700 |
By Sales |
|
| To Purchase |
900 |
Cash 520 |
|
| To wages |
150 |
Credit 1500 |
|
| To Factory Exps. |
350 |
2020 |
|
| To Office Salaries |
25 |
Less: Returns and Allowances 20 |
2000 |
| To Office Rent |
39 |
By Closing Stock |
600 |
| To Postage & Telegram |
5 |
By Dividend on Investment |
10 |
| To Directors Fee |
6 |
By Profit on Sale of Furniture |
20 |
| To Salesman Salaries |
12 |
|
|
| To Advertising |
18 |
|
|
| To Delivery Exps. |
20 |
|
|
| To Debenture Interest |
20 |
|
|
| To Depreciation |
|
|
|
| On Office Furniture |
10 |
|
|
| On Plant |
30 |
|
|
| On Delivery Van |
20 |
|
|
| To Loss on Sale of Van |
5 |
|
|
| To Income Tax |
175 |
|
|
| To Net Profit |
145 |
|
|
| Total |
2,630 |
Total |
2,630 |
|
16 |
| |
b) |
From the Vertical Income Statement Calculate:
| (i) |
Gross Profit Ratio |
| (ii) |
Operating Costs Ratio including Finance Expenses |
| (iii) |
Stock Turnover Ratio |
|
|
| |
|
|
|
| Q.6. |
|
Trial Balance as on 31st March, 2002 is furnished to you of M/s. Pady Ltd.
| Particulars |
Debit Rs. |
Credit Rs. |
| Debtors accounts |
5,00,000 |
20,000 |
| Creditors accounts |
12,000 |
4,80,000 |
| Cash & Bank Balance |
38,000 |
-- |
| Building & Provision for Dep. |
1,20,000 |
40,000 |
| Machinery & Provision for Dep. |
6,00,000 |
2,80,000 |
| Vehicles & Provision for Dep. |
50,000 |
30,000 |
| Stock of Finished Goods (on 1-4-2001) |
30,000 |
-- |
| Cost of Production |
20,92,500 |
-- |
| Sales |
-- |
25,00,000 |
| Office Expenses |
20,000 |
-- |
| Selling & Distribution Expenses |
3,10,000 |
-- |
| Prepaid and Outstanding Exps. |
8,000 |
15,000 |
| Advance Tax Paid |
1,50,000 |
-- |
| Provision for Income Tax (on 1-4-2001) |
-- |
1,40,000 |
| Investments (at cost) |
8,40,000 |
-- |
| Profit on Sale of Investments |
-- |
15,000 |
| Dividend Received |
-- |
30,000 |
| Interim Dividend |
50,000 |
-- |
| Equity Share Capital (Rs. 10 each) |
-- |
8,00,000 |
| Reserve on 1-4-2001 |
-- |
5,00,000 |
| Profit & Loss A/c on 1-4-2001 |
-- |
63,000 |
| Closing Stock of Materials & Work-in-process |
92,500 |
-- |
| |
49,13,000 |
49,13,000 |
On 31st March, 2002 stock of Fini shed Goods was Rs. 50,000. Provide for Income Tax at 30% of profits and Proposed Dividend at Rs. one per share.Prepare final accounts in suitable form for analysis. |
16 |
| |
|
|
|
| Q.7. |
|
Complete the following Trend Statement of Yuvraj by filling the blanks and comment in very brief.
| Particulars |
Rs. In Lakhs |
Trend in % |
| 1999 |
2000 |
2001 |
2002 |
1999 |
2000 |
2001 |
2002 |
| Sales |
10,000 |
|
12,000 |
13,000 |
100 |
110 |
|
130 |
| Less cost of Sales |
|
|
8,850 |
|
|
109 |
|
|
| Gross Profit |
2,500 |
|
|
3,475 |
|
|
126 |
|
| Administrative Expenses |
|
|
1,140 |
|
|
117 |
|
|
| Sales Expenses |
225 |
|
|
450 |
|
133 |
|
|
| Total Operating Expenses |
1025 |
|
1,515 |
1,737 |
|
|
|
|
| Net Profit before Tax |
|
|
|
1,738 |
|
108 |
|
|
| Income Tax |
|
636 |
|
|
|
108 |
|
118 |
| Net Profit after Tax |
885 |
|
981 |
|
100 |
|
|
|
|
16 |
| |
|
|
|
| Q.8. |
|
From the data presented by Messrs. Jyoti Petro Limited, prepare Comparative Statement in Vertical Form and offer your comments.
Balance Sheet as on 31st December
| Liabilities |
2001 Rs.
(in Lacs) |
2002 Rs.
(in Lacs) |
Assets |
2001 Rs.
(in Lacs) |
2002 Rs.
(in Lacs) |
| Creditors |
163 |
146 |
Cash & bank |
50 |
40 |
| Outstanding Exps. |
13 |
22 |
Debtors |
77 |
73 |
| 15% Debentures |
90 |
70 |
Stock |
202 |
190 |
| Depreciation Fund |
40 |
44 |
Prepaid Expenses |
1 |
2 |
| Capital Reserve |
6 |
7.8 |
Land & Building |
100 |
100 |
| P&LA/c |
10 |
15.2 |
Machinery |
72 |
80 |
| Equity Capital |
180 |
180 |
|
|
|
| Total Rs. |
502 |
485 |
Total Rs. |
502 |
485 |
Debentures were issued during the year 2000 on a short to medium term basis redeemable upto Rs. 20 lakhs each year from the year 2002 for the first 4 years and balanced in the 5th year.The comparative statement must show absolute and percentage changes. |
16 |
| |
|
|
|
| Q.9. |
|
Answer in brief:
| (a) |
Explain the drawbacks of using computer for MIS Reports. |
| (b) |
Distinguish between Gross Working Capital and Net Working Capital. |
| (c) |
Distinguish between Fund Flow Statement and Cash Flow Statement. |
| (d) |
Distinguish between Own Funds and Owed Funds. |
| (e) |
Distinguish between Over Trading & Under Trading. |
|
16 |
|
