ST.JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION MARCH/APRIL 2013

BBM – II SEMESTER (International Students)

MANAGEMENT ACCOUNTING

TIME: 1 ½  HOURS                                                                                                        Max. Marks: 50

 

Answer any 5  questions.  Each carries 10 marks.                                                            (5 x 10 = 50)

 

1. From the following forecast of income and expenditure, prepare a cash budget for the months March to June 2012.

Particulars	Sales (Credit) Rs	Purchases (Credit ) Rs	Wages	Factory Expenses	Office Expenses	Distribution Expenses (Rs)
Jan 2012	50,000	25,000	4,000	2,000	1,500	1,000
Feb	60,000	26,000	4,000	2,200	1,550	1,100
Mar	75,000	25,000	4,500	2,000	1,600	1,200
Apr	80,000	27,000	4,500	2,100	1,700	1,250
May	1,00,000	27,500	4,750	2,200	1,750	1,200
June	1,05,000	29,000	5,000	2,500	1,800	1,400

Additional information is as follows:

1. Balance of cash in hand on 1^st March 2012 is Rs. 20,000.
2. The customers are allowed a credit period of 2 months.
3. The creditors are allowing a credit of 1 month.
4. A dividend of Rs. 25,000 is payable in June.
5. Capital expenditure to be incurred :

Machinery purchased 20^th April for Rs. 10,000; a Land has been purchased on 1^st   March and the payment are to be made in monthly installments of Rs. 5,000 each.

1. Interest on Investment of Rs. 25,000 is receivable in May.
2. Wages are paid on 1^st week of the next month.
3. Lag in payment of other expenses is one month.

 

2. The expenses for the budgeted production of 10,000 units in a factory are given below:

Particulars	Per unit (Rs)
Materials	70
Labour	25
Variable overheads	20
Fixed overheads(Rs.1,00,000)	10
Variable Expenses (Direct)	5
Selling Expenses (10% fixed)	13
Distribution Expenses (20% fixed)	7
Administrative Expenses Rs. 50,000)	5
Total cost	155

Prepare a flexible budget for the production of (i) 8,000 units and (ii) 6,000 units.

3. (a) From the following data calculate:    (4 marks)

 

• Number to units to be sold to earn a profit of Rs. 1,50,000.
• Sales to earn a profit of RS. 1,50,000.

Selling price per unit Rs. 50.

Variable selling cost per unit Rs. 3.

Variable manufacturing cost per unit Rs. 22.

Fixed factory overhead Rs. 1,75,000.

Fixed selling cost Rs. 25,000.

(b) Assuming that the cost structure and selling prices remain the same in periods I and I

find out                                                                                                           (6 marks)

 

• P/V Ratio
• E. Sales
• Profit when sales are Rs. 1,00,000
• Sales required to earn a profit of Rs. 25,000.

 

Period                         Sales (in Rs)                          Profit (in Rs)

I                       1,20,000                                  9,000

II                      1,40,000                                  14,000

 

4. (a) Calculate funds from operations from the following income statement.     (4 marks)

 

Particulars	Rs.	Particulars	Rs.
To Salaries paid	1,00,000	By Gross profit	5,00,000
To Rent paid	25,000	By Profit on sale of vehicle	3,000
To Provision for depreciation	50,000	By Refund of tax	2,000
To Commission paid	5,000	By Dividend received	10,000
To Provision for tax	1,50,000
To General reserve	3,000
To Loss on sale of investment	10,000
To Cost of issue of shares written off	2,000
To provision for legal damages	5,000
To Net Profit	1,65,000
	5,15,000		5,15,000

(b) From the following information find out the changes in working capital:     (6 marks)

 

Liabilities	2011	2012	Assets	2011	2012
Share Capital	545	545	Fixed Assets	3,006	2,343
Reserves	2,459	1,660	Investments	62	62
Long –Term Loan	2,796	2,295	Inventories	2,075	1,804
Current Liabilities	1,241	1,533	Debtors	1,157	687
			Cash	512	844
Provisions	434	327	Loans & Advances	663	620
	7,475	6,360		7,475	6,360

 

 

5. Following are the summarized Balance Sheets of Arul Ltd. as on 31^st December, 2011 and 2012.

Liabilities	2011	2012	Assets	2011	2012
Share Capital	1,00,000	1,50,000	Land & Building	1,00,000	90,000
General Reserve	50,000	60,000	Plant & Machinery A/c	1,00,000	1,19,000
P& L A/c	30,500	30,000	Stock	50,000	24,000
Bank Loan	70,000	—	Debtors	75,000	63,200
Sundry Creditors	50,000	37,200	Cash	500	1,000
Provision for taxation	32,000	35,000	Bank	2,000	15,000
			Good will	5,000	—
	3,32,500	3,12,200		3,32,500	3,12,200

 

Additional Information.

During the year ended 31^st December 2012.

 

• Dividend of Rs. 23,000 was paid.
• Depreciation written off on building Rs. 10,000, Machinery Rs. 14,000.
• Income tax paid during the year Rs. 28,000.

Prepare a cash flow statement.

 

 

6. Explain in detail

• The qualities of a good report. (4 marks)
• The different kinds of management reports. (6 marks)

 

 

 

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