| ST. JOSEPH’S COLLEGE OF COMMERCE (AUTONOMOUS) |
| END SEMESTER EXAMINATIONS – MARCH/APRIL 2016 |
| B.B.M. – VI SEMESTER |
| M1 11 602 :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. |
Define the term ‘Management Accounting’? |
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2. |
Mention any two differences between Cash Flow Statement and Fund Flow Statement. |
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3. |
What are Financial Activities? Give any two examples of Financial Activities. |
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4. |
Explain the scope of Management Accounting. (any 2 points). |
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5. |
Mention any two objectives of Reports. |
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6. |
Explain Internal Reports with an example. |
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7. |
Average stock of a firm is Rs.50,000. Its opening stock is
Rs.10,000 less Than its closing stock. Find out the opening and closing stock. |
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8. |
Gross profit ratio 20% on sales. Total gross profit Rs. 1,00,000. Cash sales Rs.1,20,000. Average debtors Rs. 95,000. Calculate Debtors turn over ratio. |
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9. |
For calculating ‘Cash flow from Operating Activities’ from the given figure of ‘Net Profit’ earned during a year, how would you deal with:
| a. Decrease in Debtors |
b. Increase in Bank Balance |
| c. Increase in Bills Payable |
d. Decrease in Debentures |
|
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10. |
Calculate Inventory Turnover Ratio from the data given below:
| Inventory at the beginning of the year |
Rs. 20,000 |
| Inventory at the end of the year |
Rs. 10,000 |
| Purchases |
Rs. 2,50,000 |
| Return Outwards |
Rs. 5,000 |
| Sales |
Rs. 3,50,000 |
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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. |
Calculate the following ratios with the help of the information given:
| a) Gross Ratio |
b) Net 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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13. |
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 |
18,000 |
15,000 |
| Prepaid Insurance |
16,000 |
29,000 |
| Goodwill |
32,000 |
35,000 |
| Provision for Doubtful Debts |
20,000 |
14,000 |
| Balance of Trade Receivables |
1,10,000 |
1,98,000 |
| Provision for Income Tax |
45,000 |
35,000 |
| Cash and bank balance |
23,000 |
25,000 |
|
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14. |
Calculate Funds from Operation from the following:
| a |
Net Profit for the year ended 31.03.2015 is Rs. 3,85,000. |
| b |
Loss on sale of building Rs. 35,500. |
| c |
Goodwill appears in the books at Rs. 80,000 out of which 20% has been written off. |
| d |
Old Machinery worth Rs. 18,000 has been sold for Rs. 20,000 during the year. |
| e |
Rs. 25,000 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. 8,00,000. |
|
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15. |
From the following Balance Sheets of the Vivek Industries Ltd. compute the trend percentages using 2012-13 as the base year. (Interpretations not required)
| Particulars |
2012-13 |
2013-14 |
2014-15 |
| Share Capital |
2,60,000 |
3,25,000 |
3,90,000 |
| Reserves |
1,30,000 |
1,95,000 |
1,95,000 |
| Loans |
2,60,000 |
1,30,000 |
65,000 |
| Sundry Creditors |
3,90,000 |
5,20,000 |
2,60,000 |
| Buildings |
2,60,000 |
3,25,000 |
3,90,000 |
| Plant |
2,60,000 |
3,25,000 |
1,30,000 |
| Stock |
3,25,000 |
3,25,000 |
1,95,000 |
| Debtors |
1,30,000 |
1,30,000 |
1,30,000 |
| Cash at Bank |
65,000 |
65,000 |
65,000 |
|
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16. |
Explain the General Principles of a Good Reporting System. |
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SECTION – C |
| III) |
Answer any THREE questions. Each carries 15 marks. (3×15=45) |
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17. |
John 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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18. |
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 |
1,80,000 |
2,40,000 |
| Equity Share Capital |
2,25,000 |
6,00,000 |
| Reserves and Surplus |
21,000 |
27,000 |
| Non-current Liabilities |
|
|
| Long-term Loans |
1,72,500 |
1,95,000 |
| Current Liabilities: |
|
|
| Bills Payables |
3,000 |
0 |
| Sundry Creditors |
18,000 |
6,000 |
| Outstanding Expenses |
22,500 |
9,000 |
| Proposed Dividend |
15,000 |
1,35,000 |
| Total |
6,57,000 |
12,12,000 |
| Assets: |
|
|
| Non-current Assets |
|
|
| Land and Building |
1,20,000 |
1,84,500 |
| Plant and Machinery |
5,01,000 |
9,00,000 |
| Current Assets |
|
|
| Temporary Investments |
1,500 |
60,000 |
| Inventories |
15,000 |
37,500 |
| Trade Receivables |
6,000 |
12,000 |
| Prepaid Expenses |
1,500 |
3,000 |
| Cash and Cash Equivalents |
12,000 |
15,000 |
| Total |
6,57,000 |
12,12,000 |
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?
Has fixed assets been financed by Working Capital in any of the companies?
|
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19. |
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, 2015
| Particulars |
Note No. |
31.12.2015 |
31.12.2014 |
| 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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|
|
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| (3) Non-current Liabilities: |
|
|
|
| (a) Long-term borrowings |
|
78,000 |
– |
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|
|
|
| (4) Current Liabilities: |
|
|
|
| (a) Short-term borrowings |
|
|
|
| (b) Trade Payables (Creditors) |
|
1,09,200 |
1,00,500 |
| ( c) Other current liabilities |
|
|
|
| ( d) Short-term provisions (Tax) |
|
32,700 |
29,400 |
| |
|
|
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| TOTAL |
|
7,05,300 |
4,70,400 |
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|
|
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| II. ASSETS: |
|
|
|
| (1) Non-current assets: |
|
|
|
| (a) Fixed Assets: |
|
|
|
| (i) Tangible Assets |
2 |
4,98,000 |
2,80,200 |
| (ii) Intangible Assets |
|
|
|
| (b) Non-current Investments |
|
|
|
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|
|
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| (2) Current Assets: |
|
|
|
| (a) Current Investments |
|
|
|
| (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 |
|
|
|
|
(f) Other Current Assets |
|
|
|
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|
|
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| TOTAL |
|
7,05,300 |
4,70,400 |
| Note: 1: |
|
|
|
| Reserves and Surplus: |
|
31.12.2015 |
31.12.2014 |
| General Reserve |
|
27,000 |
18,000 |
| Share Premium |
|
36,000 |
24,000 |
| Profit and Loss A/c |
|
62,400 |
58,500 |
| |
|
1,25,400 |
1,00,500 |
| Note: 2: |
|
|
|
| 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.
|
|
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20. |
XY Company Ltd. is unable to pay dividends to the shareholders of the company due to shortage of cash and cash equivalents, in spite of making reasonable profits for the past few years.
You are asked to submit a report to the management bringing out the reasons for the shortage of cash and cash equivalents and your suggestions to the management to overcome the situation. |
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21. |
Using the following details, prepare Balance Sheet of Ajay Ltd.:
a) Current Ratio = 2.75
b) Quick Ratio = 2.25
c) Working Capital = Rs.7,00,000.
d) Reserves and Surplus = Rs. 1,00,000.
e) Total current assets included stock, debtors and cash only, which are in the ratio of 2 : 6 : 3
f) Total current liabilities included creditors and bills payable in the ratio of 3 : 2
g) Fixed Assets are 50% of Share Capital.
h) The Share Capital is Rs. 12,00,000. There are no other items of assets or liabilities.
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| SECTION – D |
| IV) |
Case Study – Compulsory question. (1×15=15) |
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22. |
The Balance Sheets of Deeps Ltd., is as follows:
| Liabilities |
2014 |
2015 |
Assets |
2014 |
2015 |
| Equity Share Capital |
4,00,000 |
5,00,000 |
Plant and Machinery |
6,00,000 |
6,80,000 |
| Bank Loan |
1,00,000 |
60,000 |
Goodwill |
50,000 |
40,000 |
| Reserves & Surplus |
80,000 |
50,000 |
Sundry Debtors |
30,000 |
14,000 |
| Debentures |
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 |
20,000 |
6,000 |
| Sundry Creditors |
60,000 |
75,000 |
Preliminary Expenses |
10,000 |
7,000 |
| Total |
7,80,000 |
8,07,000 |
Total |
7,80,000 |
8,07,000 |
You are required to calculate the following:
a) Prepare the Schedule of Changes in Working Capital for the year ending 2015 (6 Marks)
b) Calculate cashflow from Operation for the year ending 2015. (5 Marks)
c) Current Ratio and Quick Ratio for the year 2015. (4 Marks)
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