| ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS) |
| END SEMESTER EXAMINATION – SEPT/OCT. 2015 |
| B.COM (T.T.) – V SEMESTER |
| C2 12 502 : MANAGEMENT ACCOUNTING |
| Duration: 3 Hours Max. Marks: 100 |
| SECTION – A |
| I) |
Answer ALL the questions. Each carries 2 marks. (10×2=20) |
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1. |
Mention any two characteristics of Management Accounting. |
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2. |
Issue of Shares against purchase of Land Rs. 25,00,000. Does this transaction involve flow of funds? Give reason. If it does, state the amount of flow. |
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3. |
Mention any four tools of Financial Statement Analysis. |
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4. |
What is Management Accounting? |
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5. |
Mention any two roles of a Management Accountant in the present scenario. |
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6. |
‘Management Accounting is very advantageous to any organization’. Mention any two advantages to support this statement. |
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7. |
Working Capital is Rs. 5,40,000; Current Ratio = 2.8 : 1; Inventory = Rs. 3,30,000. Calculate Current Assets, Current Liabilities and Quick Ratio. |
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8. |
Under what heads do the following appear in Cash Flow Statement.
| A |
Interest received on Investments. |
| B |
Dividends paid on Preference Shares. |
| C |
Purchase of Fixed Assets. |
| D |
Purchase of Stock against issue of shares. |
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9. |
From the following, calculate Debt-equity Ratio.
| Particulars |
Amount (Rs.) |
| Equity Share Capital |
2,50,000 |
| Reserves and Surplus |
1,50,000 |
| Profit and Loss |
25,000 |
| 12% Debentures |
2,00,000 |
|
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10. |
Calculate Funds from Operation from the following:
| Particulars |
Amount (Rs.) |
| Net Profit as per Profit and Loss Account |
1,25,000 |
| Interest on Investments received |
1,500 |
| Loss on sale of assets |
2,000 |
| Depreciation on Plant and Machinery |
12,000 |
| Salary paid for the year |
72,000 |
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| SECTION – B |
| II) |
Answer any FOUR questions. Each carries 5 marks. (4×5=20) |
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11. |
Mention any five differences between Financial Accounting and Management Accounting. |
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12. |
From the following Balance Sheets of the Hindusthan Industries Ltd. compute the trend percentages using 31st March 2013 as the base year. (INTERPRETATIONS NOT REQUIRED)
| Particulars |
2012-2013 |
2013-2014 |
2014-2015 |
| Share Capital |
2,00,000 |
2,50,000 |
3,00,000 |
| Reserves |
1,00,000 |
1,50,000 |
1,50,000 |
| Loans |
2,00,000 |
1,00,000 |
50,000 |
| Sundry Creditors |
3,00,000 |
4,00,000 |
2,00,000 |
| Buildings |
2,00,000 |
2,50,000 |
3,00,000 |
| Plant |
2,00,000 |
2,50,000 |
1,00,000 |
| Stock |
2,50,000 |
2,50,000 |
1,50,000 |
| Debtors |
1,00,000 |
1,00,000 |
1,00,000 |
| Cash at Bank |
50,000 |
50,000 |
50,000 |
|
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13. |
Calculate funds from Operation from the following:
| a. |
Net Profit for the year ended 31.03.2015 is Rs. 16,50,000. |
| b. |
Gain on sale of building Rs. 35,500. |
| c. |
Goodwill appears in the books at Rs. 1,80,000 out of which 20% has been written off. |
| d. |
Old Machinery worth Rs. 18,000 has been sold for Rs. 16,500 during the year. |
| e. |
Rs. 1,75,000 has been transferred to General Reserve. |
| f. |
Depreciation has been provided on Machinery and Furniture at 10% of total cost. Total Cost of Machinery and Furniture amount to Rs. 60,50,000. |
|
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14. |
The expenses for the production of 5,000 units in a factory are given as follows:
| Particulars |
Per Unit (Rs.) |
| Materials |
50 |
| Labour |
20 |
| Variable Overheads |
15 |
| Fixed Overheads (Rs. 50,000) |
10 |
| Administrative expenses (5% variable) |
10 |
| Selling Expenses (20% Fixed) |
6 |
| Distribution expenses (10% Fixed) |
5 |
| Total cost of sales per unit |
116 |
You are required to prepare a budget for the production of 7,000 units. |
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15.
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From the following figures calculate cash flow from operating activities:
| Particulars |
2015 (Rs.) |
2014 (Rs.) |
| Balance of Profit & Loss |
5,00,000 |
2,50,000 |
| Provision for Depreciation |
1,60,000 |
80,000 |
| Outstanding wages |
8,000 |
15,000 |
| Prepaid Insurance |
16,000 |
9,000 |
| Goodwill |
25,000 |
32,000 |
| Provision for Doubtful Debts |
20,000 |
14,000 |
| Balance of Trade Receivables |
1,10,000 |
98,000 |
| Provision for Income Tax |
45,000 |
25,000 |
| Cash and bank balance |
13,000 |
25,000 |
|
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16. |
Calculate the following ratios with the help of the information given:
| a) Operating Ratio |
b) Gross Profit Ratio |
| c) Quick Ratio |
d) Turnover to Working Capital Ratio |
| e) Shareholders’ Funds to Total Assets Ratio. |
|
Information:
| Particulars |
Rs. |
Particulars |
Rs. |
| Equity Share Capital |
2,00,000 |
Opening Inventory |
24,000 |
| 8% Preference Share Capital |
1,60,000 |
Purchases |
2,40,000 |
| 9% Debentures |
1,20,000 |
Wages |
16,000 |
| General Reserve |
20,000 |
Closing Inventory |
36,000 |
| Sales |
4,00,000 |
Selling and Distribution Expenses |
4,000 |
| Liquid Assets |
1,00,000 |
Non-current Assets |
4,24,000 |
| Current Liabilities |
60,000 |
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| SECTION – C |
| III) |
Answer any THREE questions. Each carries 15 marks. (3×15=45) |
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17. |
With the help of following ratios and further information given below, complete the Trading Account, Profit and Loss Account and Balance Sheet of Deepa and Co.
| Gross Profit Ratio |
20% |
Net Profit Ratio |
15% |
| Sales/Inventory Ratio |
6 |
Fixed Assets/Total Current Assets |
1:1 |
| Fixed Assets/Total Capital |
3/2 |
Capital/Total Outside Liabilities |
1 / 2 |
| Inventory (Rs.) |
3,90,000 |
Fixed Assets (Rs.) |
27,00,000 |
Trading and Profit and Loss Account
| Particulars |
Amount |
Particulars |
Amount |
| To Cost of goods sold |
|
By Sales |
|
| To Gross Profit c/d |
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|
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| To Expenses |
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By Gross Profit b/d |
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| To Net Profit |
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Balance Sheet as at ………
| Liabilities |
Amount |
Amount |
Assets |
Amount |
Amount |
| Capital |
|
|
Fixed Assets |
|
|
| Add: Profit |
|
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Current Assets: |
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|
Stock |
|
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| Outside Liabilities |
|
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Other Current Assets |
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| Total |
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Total |
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18. |
From the following prepare the schedule of changes in Working Capital and Fund Flow Statement.
Name of the Co.: ABC Ltd.
Balance Sheet as at 31st December, 2014
| Particulars |
Note No. |
31.12.2014 |
31.12.2013 |
| I. EQUITY AND LIABILITIES: |
|
|
|
| (1) Shareholders’ Funds: |
|
|
|
| (a) Share Capital |
|
3,60,000 |
2,40,000 |
| (b) Reserves and Surplus |
1 |
1,25,400 |
1,00,500 |
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| (2) Share Application Money pending allotment |
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| (3) Non-current Liabilities: |
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| (a) Long-term borrowings (8% Debentures) |
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78,000 |
– |
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| (4) Current Liabilities: |
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| (a) Short-term borrowings |
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| (b) Trade Payables (Creditors) |
|
1,09,200 |
1,00,500 |
| ( c) Other current liabilities |
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| ( d) Short-term provisions (Tax) |
|
32,700 |
29,400 |
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| TOTAL |
|
7,05,300 |
4,70,400 |
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| II. ASSETS: |
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| (1) Non-current assets: |
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| (a) Fixed Assets: |
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| (i) Tangible Assets |
2 |
4,98,000 |
2,80,200 |
| (ii) Intangible Assets |
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| (b) Non-current Investments |
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| (2) Current Assets: |
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| (a) Current Investments |
|
|
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| (b) Inventories |
|
78,000 |
66,300 |
| ( c) Trade Receivables (Debtors) |
|
1,17,300 |
1,09,500 |
| ( d) Cash and Cash Equivalents (Bank) |
|
12,000 |
14,400 |
| (e) Short-term Loans and Advances |
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| (f) Other Current Assets |
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| TOTAL |
|
7,05,300 |
4,70,400 |
| Note: 1: |
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| Reserves and Surplus: |
|
31.12.2014 |
31.12.2013 |
| General Reserve |
|
27,000 |
18,000 |
| Share Premium |
|
36,000 |
24,000 |
| Profit and Loss A/c |
|
62,400 |
58,500 |
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|
1,25,400 |
1,00,500 |
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|
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| Note: 2: |
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| Tangible Assets |
|
|
|
| Land and Building |
|
3,39,600 |
1,66,200 |
| Plant and Machinery |
|
1,53,900 |
1,06,800 |
| Furniture |
|
4,500 |
7,200 |
| |
|
4,98,000 |
2,80,200 |
Additional Information:
| Depreciation written off during the year on Machinery is Rs. 38,400 and on Furniture is Rs. 1,200.
Assume Debentures were issued at the beginning of the year. |
|
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19. |
A company is expecting to have Rs. 18,000 cash in hand on 1.4.2015 and it requests you to prepare cash budget for the three months, April to June 2015. The following information is supplied to you:
| Month |
Sales (Rs.) |
Purchases (Rs.) |
Wages (Rs.) |
Expenses (Rs.) |
| Feb |
70,000 |
44,000 |
6,000 |
5,000 |
| Mar |
80,000 |
56,000 |
9,000 |
6,000 |
| Apr |
96,000 |
60,000 |
9,000 |
7,000 |
| May |
1,00,000 |
68,000 |
11,000 |
9,000 |
| Jun |
1,20,000 |
62,000 |
14,000 |
9,000 |
Other information:
a) Period of credit allowed by suppliers is two months.
b) 15% of sales are for cash and the period of credit allowed to customers for credit sales is one month.
c) Delay in payment of wages and expenses one month.
d) Income tax Rs. 28,000 is to be paid in June 2015.
e) Dividend to be received in May 2015 Rs. 5,000.
f) Capital Expenditure to be incurred in May 2015 is Rs. 60,000. |
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20. |
Vishnu. Ltd provides you the following information for the year ending 31st March 2015.
| 1 |
Sales for the year amounted to Rs. 2,00,000 out of which 60% is for cash. |
| 2 |
Cost of goods sold was 50% of total sales. |
| 3 |
All inventories were purchased on credit. |
| 4 |
Collections from debtors amounted to Rs. 60,000. |
| 5 |
Payments to creditors for inventory totaled Rs. 45,000. |
| 6 |
Depreciation charged during the year on machinery amounted to Rs. 15,000. |
| 7 |
Goodwill written off during the year Rs.30,000 |
| 8 |
Total salary for the period amounted to Rs. 6,000 out of which Rs.1,000 was outstanding. |
| 9 |
Office expenses paid in cash amounted to Rs.8,000 and outstanding office expenses were Rs.2,000. |
| 10 |
Land was purchased for Rs. 2,50,000 and the consideration was discharged by the allotment to the vendors of zero percent convertible debentures. |
| 11 |
Fully paid equity shares of the face value of Rs. 2,00,000 were issued at a premium of 20%. |
|
12 |
A machine was sold for Rs. 15,000. The book value of the machine was Rs. 17,000. |
| 13 |
Another machine having a book value of Rs. 4,000 was scrapped and was treated as ordinary business loss. |
| 14 |
A vehicle was purchased for cash at a cost of Rs. 1,50,000. |
| 15 |
Dividends paid during the period amounted to Rs. 40,000. |
| 16 |
Income tax paid Rs.10,000. |
| 17 |
Cash in hand and at bank as at 31st March 2014 totaled Rs. 75,000. |
You are required to prepare a Cash Flow statement using direct method. |
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21. |
The Balance Sheets of S & Co. and K & Co. are given as follows:
Balance Sheets as at 31.03.2015
| Particulars |
S & Co. (Rs.) |
K & Co. (Rs.) |
| Equity and Liabilities: |
|
|
| Shareholders’ Funds: |
|
|
| Preference Share Capital |
1,20,000 |
1,60,000 |
| Equity Share Capital |
1,50,000 |
4,00,000 |
| Reserves and Surplus |
14,000 |
18,000 |
| Non-current Liabilities |
|
|
| Long-term Loans |
1,15,000 |
1,30,000 |
| Current Liabilities: |
|
|
| Bills Payables |
2,000 |
0 |
| Sundry Creditors |
12,000 |
4,000 |
| Outstanding Expenses |
15,000 |
6,000 |
| Proposed Dividend |
10,000 |
90,000 |
| Total |
4,38,000 |
8,08,000 |
| Assets: |
|
|
| Non-current Assets |
|
|
| Land and Building |
80,000 |
1,23,000 |
| Plant and Machinery |
3,34,000 |
6,00,000 |
| Current Assets |
|
|
| Temporary Investments |
1,000 |
40,000 |
| Inventories |
10,000 |
25,000 |
| Trade Receivables |
4,000 |
8,000 |
| Prepaid Expenses |
1,000 |
2,000 |
| Cash and Cash Equivalents |
8,000 |
10,000 |
| Total |
4,38,000 |
8,08,000 |
Prepare the Common Size Balance Sheet of the two Companies and answer the following questions:
(a) What is the position of working capital in both the companies?
(b) Which company has depended more on outsiders’ funds?
(c) Has fixed assets been financed by Working Capital in any of the companies? |
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SECTION – D |
| IV) |
Case Study (1×15=15) |
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22. |
The Balance Sheets of Vijay Ltd., are as follows:
| Liabilities |
31.03.14 |
31.03.15 |
Assets |
31.03.14 |
31.03.15 |
| Equity Share Capital |
4,00,000 |
5,00,000 |
Plant and Machinery |
6,00,000 |
6,80,000 |
| Term Loan |
1,00,000 |
60,000 |
Non-current Investments |
50,000 |
40,000 |
| Reserves & Surplus |
80,000 |
50,000 |
Sundry Debtors |
30,000 |
14,000 |
| Public Deposits |
1,00,000 |
75,000 |
Stock |
65,000 |
60,000 |
| Provision for tax |
20,000 |
22,000 |
Prepaid Expenses |
5,000 |
0 |
| Proposed Dividend |
20,000 |
25,000 |
Cash at Bank |
30,000 |
13,000 |
| Sundry Creditors |
60,000 |
75,000 |
|
|
|
| Total |
7,80,000 |
8,07,000 |
Total |
7,80,000 |
8,07,000 |
You are required to:
a) Prepare a Statement of Changes in Working Capital. (5 Marks)
b) Calculate the Current Ratio and Liquid Ratio of the Company as at 31.03.2014 and 31.03.2015. (4 Marks)
c) Calculate the new Current Ratio of the company after it pays off the proposed dividend of Rs. 20,000 on 01.04.2015. (2 Marks)
d) Mention at least 4 transactions which will not affect the flow of funds. (4 Marks)
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