1. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS)

END SEMESTER EXAMINATION – SEPT /OCT. 2014

B.Com (Travel & Tourism) – V SEMESTER

MANAGEMENT ACCOUNTING

Duration: 3 Hours                                                                                       Max. Marks: 100

SECTION – A

 

1. Answer ALL the questions. Each carries 2 marks.                                      (10 x2 =20)

 

1. How does a Cash Flow Statement differ from a Fund Flow Statement?
2. Mention any four essentials of an effective system of Budgetary Control?
3. State with examples the type of transactions that do not result in a flow of funds?
4. Differentiate between a fund flow statement and an Income statement.
5. Calculate Stock Turnover Ratio from the following information:

Opening Stock                        Rs. 30,000

Purchase                                 Rs. 1,15,000

Closing Stock                          Rs. 20,000

6. Current ration 2.50 Acid test ratio 1.75 Stock Rs. 1,50,000. Calculate net working capital.
7. Classify the following into:

• Operating Activities (ii) Investing Activities (iii) Financing Activities
• Interest paid on Debentures or Long term loans by a Financing Company.
• Interest paid on Debentures or Long term loans by a Non Financing Company.
• Sale of patents.
• Issue of share capital

 

8. List the chief characteristics of Management Accounting.

 

9. The opening balance in the Provision for Taxation Account as on 1^st January 2013 was Rs. 30,000 and the closing balance on 31^st December 2013 was Rs. 40,000. The taxes paid during the year amounted to Rs. 25,000. How will you deal with this item in the fund flow statement?

 

10. Average stock of a firm is Rs. 1,00,000 and its opening stock is Rs. 10,000 less than the closing stock . Calculate opening and closing stock.

 

SECTION – B

1. Answer any FOUR Each carries 5 marks.                                        (4×5=20)

 

11. Alpha Manufacturing Co. has drawn up the following Profit and Loss Account for the year ended 31^st March 2013.

 

Particulars	Amount	Particulars	Amount
To Opening Stock	26,000	By Sales	1,60,000
To Purchases	80,000	By Closing Stock	38,000
To Wages	24,000
To Manufacturing Expenses	16,000
To Gross Profit c/d	52,000
	1,98,000		1,98,000
To Selling & Dist Expenses	4,000	By Gross Profit b/d	52,000
To Administrative Expenses	22,800	By Compensation for acquisition of land	4,800
To General Expenses	1,200
To Value of Furniture (loss by fire)	800
To Net Profit	28,000
	56,800		56,800

 

You are required to calculate :

• Selling and distribution  expenses ratio
• Gross Profit Ratio
•  Net Profit Ratio
•  Operating Ratio
• Operating Profit Ratio.

 

12. State with reasons whether the following transactions result in an increase or decrease of working capital or do not affect the working capital.

(a) Issue of equity shares of Rs. 2,50,000 for cash.

(b) Land was exchanged for machinery worth Rs. 1,50,000.

(c ) Sold goods costing Rs. 25,000 for Rs. 30,000.

(d) Debtors of Rs. 10,000 paid cash.

(e) Purchased machinery for Rs. 75,000 in cash.

 

13. Calculate Fund from operations from the following Profit and Loss A/c.

 

 

 

 

Profit & Loss Account
Particulars	Rs	Particulars	Rs
To Salaries	10,000	By Gross Profit	2,00,000
To Rent	3,000	By Profit on sale of Machine	5,000
To commission	2,000	By Refund of tax	3,000
To Discount allowed	1,000	By Dividends received	2,000
To Selling Expenses	20,000
To Transfers to General Reserve	20,000
To Provision for tax	10,000
To Loss on sale of Investments	5,000
To Discount on issue of Debentures	2,000
To Preliminary Expenses	3,000
To Provision for Depreciation	14,000
To Net Profit	1,20,000
	2,10,000		2,10,000

 

 

14. From the following information of a manufacturing concern . Compute Trend ratios taking 2010 as the base year (interpretation not required).

 

Particulars	2010	2011	2012	2013
Sales (Net) Less: Cost of goods sold Gross Profit Less: Operating expenses Net operating profit Less: taxes Profit after tax	100 60 40 10 30 15	90 60 30 10 20 10	120 70 50 15 35 17.5	150 80 70 20 50 25
	15	10	17.5	25

 

15. From the following particulars , prepare a Cash Flow Statement for the year ended 31^st March 2013.

(i) Total sales for the year were Rs. 20,50,000 out of which cash sales amounted to Rs. 14,20,000.

(ii)  Total purchases for the year were Rs. 15,30,000 out of which cash purchases totalled Rs. 10,20,000.

• Cash collected from credit customers during the year amounted to Rs. 4,80,000.
• Cash paid to suppliers of goods on credit was Rs. 4,50,000.
• Depreciation for year was Rs. 40,000 whereas salaries and other expenses amounted

to Rs. 1,60,000

• Redeemable preference shares of the face value of Rs. 1,00,000 were redeemed during

the year at a premium of 10% .

• Income tax paid Rs. 80,000.
• New machinery was purchased for Rs. 30,000 on 1^st January 2013.
• 25,000 was paid as dividend for the year ended 31^st March 2013.
• Equity shares of the face value of Rs. 2,00,000 were issued at a premium of 5% during the year .
• The balance of cash and bank as on 1^st April 2012 was Rs. 85,000.

 

16. Calculate ‘Cash from operations’ from the following information:

 

	March 31, 2013 Rs.	March 31, 2014 Rs.
Profit & Loss Account	80,000	90,000
Stock	60,000	50,000
Debtors	25,000	23,000
Bills Receivable	8,000	9,000
Creditors	32,000	28,000
Expenses outstanding	3,500	4,500
Bills Payable	35,000	22,000

 

SECTION – C

III)     Answer any THREE questions.      Each carries 15 marks.                     (3×15=45)

 

17.a) Nike Ltd has three sales divisions at Mumbai , Bangalore and Delhi . It sells two products – Product X and Product Y. The budgeted sales for the year ending 31^st December 2012 at each place are given below:

Mumbai	Product X Product Y	1,00,000 units @ Rs. 8 each 70,000 units @ Rs. 5 each
Bangalore	Product Y	1,10,000 units @  Rs. 5 each
Delhi	Product X	1,50,000 units @ Rs. 8 each

 

The actual sales during the same period were as follows:

Mumbai	Product X Product Y	1,25,000 units @ Rs. 8 each 75,000 units @ Rs. 5 each
Bangalore	Product Y	1,25,000 units @  Rs. 5 each
Delhi	Product X	1,55,000 units @ Rs. 8 each

From the reports of the sales personnel it was considered that the sales budget for the year ending 31^st December 2013 would be higher than 2012 budget in the following aspects:

Mumbai	Product X Product Y	8,000 units 5,000 units
Bangalore	Product Y	13,000 units
Delhi	Product X	10,000 units

Intensive sales campaign Bangalore and Delhi is expected to result in additional sales of 25,000 units in product X in Bangalore and 18,000 units of product Y in Delhi.

You are required to prepare a sales budget for the period ending 31^st December 2013.

 

1. b) Explain any five differences between Financial Accounting and Management Accounting.                                                                                                             (10+5)
2. Following are the summarized balance sheets of ESS GEE Ltd. as on December , 31^st 2012 and 2013.

Liabilities	2012 (Rs)	2013 (Rs)	Assets	2012 (Rs)	2013 (Rs)
Share Capital	1,00,000	1,30,000	Land & Building	1,00,000	95,000
General Reserve	25,000	30,000	Machinery	75,000	84,500
Profit and Loss A/c	15,200	15,400	Stock	50,000	37,000
Bank Loan (Long term)	35,000	—	Sundry Debtors	40,000	32,100
Sundry Creditors	75,000	67,500	Cash	200	300
Provision for tax	15,000	17,500	Bank	—	4,000
			Goodwill	—	7,500
	2,65,200	2,60,400		2,65,200	2,60,400

 

Additional Information:

• Dividend of Rs. 11,500 was paid.
• Assets of another company were purchased for a consideration of Rs. 30,000 payable in shares .

The following assets were purchased:

Stock Rs. 10,000                    Machinery Rs. 12,500

• Machinery was further purchased for Rs. 4,000.
• Depreciation written off machinery Rs. 6,000.
• Income tax provided during the year Rs. 16,500.
• Loss on sale of machine Rs. 100 was written off to General Reserve.

You are required to prepare a  Funds Flow statement.

 

19. Prepare the Balance Sheet of KT Ltd as on 31^st March 2013 from the following.

Gross Profit ratio	25%
Current ratio	2.3
Liquidity ratio	1.2
Stock Turnover ratio	4.5 times
Fixed Assets Turnover ratio (Based on sales)	2 times
Debt collection period	1.5 months
Fixed Assets to Shareholders net worth	1.2
Reserves and Surplus to Equity	0.3
Net Working Capital	Rs. 2,60,000

 

20. Following is the balance sheet of AB Co Ltd as at 1/01/ 2013. And 31/12/ 2013

Liabilities	1/01/2013	31/12/2013	Assets	1/01/2013	31/12/2013
Equity share capital	3,00,000	3,50,000	Land & building	2,30,000	3,90,000
Share premium	_____	30,000	Plant & Machinery	85,400	1,40,000
General reserve	45,000	65,000	Furniture	5,500	6,500
Profit and loss	30,000	80,800	Stock	82,400	95,700
Debentures	______	70,000	Sundry debtors	75,000	85,500
Sundry creditors	85,000	90,700	Bank balance	34,200	44,300
Provision for taxation	22,500	40,500
Proposed dividend	30,000	35,000
	5,12,500	7,62,000		5,12,500	7,62,000

 

 

 

Additional Information:

• Depreciation written off during the year.

Land and building                 Rs. 60,000

Plant and machinery                        Rs. 50,000

Furniture                               Rs. 1,200

• Tax paid during the year Rs. 22,500 and dividend paid is Rs. 30,000

You are required to prepare a Cash Flow Statement.

 

21. The expenses budgeted for production of 10,000 units in a factory are furnished

below:

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

 

You are required to prepare a budget for the production of 6000 units, 8,000 units and 10,000 units showing total cost  and  cost per unit.

 

SECTION – D

 

1. IV) Case study- Compulsory questions.             (15 marks)

 

22. The following are the balance sheets o Hindustan Ltd for the year 1/01/2012 and 31/12/2012.

 

 

 

 

 

 

 

Liabilities	1/01/2012	31/12/2012	Assets	1/01/2012	31/12/2012
Equity share capital	4,00,000	6,60,000	Fixed assets less depreciation	4,80,000	7,00,000
Pre. Share capital	2,00,000	3,00,000	Stock	80,000	1,00,000
Reserves	40,000	60,000	Debtors	2,00,000	2,50,000
Profit & Loss A/c	30,000	40,000	Bills Receivable	40,000	1,20,000
Bank O.D.	1,00,000	1,00,000	Prepaid expenses	20,000	24,000
Creditors	80,000	1,00,000	Cash in hand	80,000	1,06,000
Provision for taxation	40,000	50,000	Cash at Bank	20,000	60,000
Proposed dividend	30,000	50,000
	9,20,000	13,60,000		9,20,000	13,60,000

 

(a) Compare the financial position of the above two companies with the help of a

Comparative Balance Sheet.

(b)  Identify the changes that have taken place in the working capital of the company

and comment.

(c ) Has the increase in fixed assets been financed from long or short term funds?

How would you evaluate the company’s policy with regard to this aspect?

(d) Comment on the short term and long term position of the concern and draw a

conclusion of the overall profitability of the organisation.

 

                     

 

Latest Govt Job & Exam Updates:

View Full List ...