LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034  B.B.A DEGREE EXAMINATION – BUSINESS ADMINISTRATION

AU 09

FIFTH SEMESTER – NOV 2006

         BU 5501 – COST & MANAGEMENT ACCOUNTING

(Also equivalent to BUA 507)

 

 

Date & Time : 27-10-2006/9.00-12.00         Dept. No.                                                       Max. : 100 Marks

Section –A

( Answer all Questions)                                    (10×2=20)

1.Define cost Accountancy.

2.Give four examples of indirect expenses.

3.What do understand by perpetual inventory system?

4.What do you mean by Normal idle time?

5.Calculate the value of cost of goods sold.

Rs

Net works cost                                         2,00,000

Office overhead                                          40,000

Selling overhead                                         30,000

Opening stock of finished goods                  8,000

Closing stock of finished goods                 10,000

6.Calculate average collection period from the following particulars

Rs

Credit sales for the year             12,000

Debtors                                         1,000

Bills receivable                             1,000

7.What is meant by stock turnover ratio?.

8.Ascertain provision made for tax during 2005-06

Rs

Provision for tax on 1-4-2005            80,000

Provision for tax on 31-3-2006       1,00,000

Tax paid during the year                     60,000

9.Define marginal costing.

10.Calculate p/v ratio from the particulars.

2004; Sales   Rs.6,00,000 ; Profit  Rs.1,00,000

2005; Sales Rs.10,00,000 ; Profit.Rs.1,80,000

 

SECTION-B

( Answer any five questions, choosing not less than TWO from each group)

(5×8=40)

GROUP-I

 

11. Explain in detail the advantages and disadvantages of Cost accounting.

12.Apportion the overheads among the departments A,B,C an D.

Rs                                                        Rs

Works manager’s salary            4,000       Power                                21,000

Contribution to P.F.                   9,000      Depreciation                      20,000

Plant maintenance                     4,000       Rent                                     6,000

Canteen expenses                    12,000

 

 

 

 

 

Additional information;

 

Particulars	A	B	C	D
Number of employees Area occupied ( sq.feet)        Value of the plant (Rs) Wages (Rs) Horse power	16   2,000   75,000   40,000 3	8   3,000   1,00,000   20,000 3	4   500   25,000   10,000 1	4   500   —-   5,000 —-

13. .The following information is pertaining to a Firm

Annual consumption  – 12,000 units (360) days

Cost per unit               – Re.1

Cost per order             – Rs.12

Inventory carrying cost – 20%

Lead time                (maximum, normal, minimum)  30-15-5 (days)

Daily consumption  (maximum, normal, minimum)  ,45-33-15 (units)

Calculate EOQ and Inventory levels.

 

14.a) From the following particulars , workout the total amount payable to the three

workmen and the rate earned by them under;

i)Halsey plan and b) Rowan plan .

Standard time allowed     ; 12 hours

Actual time taken by;

A-8 hours, B-6 hours , C-4 hours.               (4)

1. b) A company presents the following information ;

Number of employees 0n 1-1-2005           ;     200

Number of employees as on 31-12-2005;       240

Number of employees resigned                 ;      20

Number of employees discharged             ;        5

Number of employees replaced                 ;      18

Calculate labour turnover ratios under all the methods.                     (4)

 

 

GROUP-II

 

15 a) Compare and contrast between Management Accounting and Cost Accounting.(4)

 

1. b) Write short notes on the following (4)
2. i) BEP ii) Margin of safety

 

 

 

 

 

16.A company presents the following information,

year	units	Total cost  (Rs)	Sales(Rs)
2004	10,000	80,000	1,00,000
2005	12,000	90,000	1,20,000

Find out the following;

2005. P/V ratio b) BEP both in units and amount c) Fixed cost d) margin of safety for the year 2005.

17.From the following data, calculate the following ratios.

a)Current ratio b) Liquid ratio c) Debt Equity ratio d) Fixed assets ratio.

Balance sheet as on 31-3-2004

——————————————————————————————————–

Liabilities                     Rs                        Assets                       Rs

Equity capital                      1,00,000          Land & building             75,000

Reserve fund                          50,000          Plant& machinery          80,000

Profit&loss a/c                       20,000          Stock in trade                 30,000

10% debentures                     50,000          Sundry debtors               50,000

Sundry creditors                    30,000          Bills receivable               20,000

Bills payable                         15,000          Cash in hand                   10,000

———–                                                ————-

2,65,000                                               2,65,000

————                                               ————-

18.From the following profit& loss a/c , calculate the following ratios.

1. A) G/P ratio b) N/P ratio c) Operating profit ratio d) Operating ratio

 

—————————————————————————————————

Particulars                  Rs                              Particulars                          Rs.

—————————————————————————————————-

To opening stock               1,00,000        By sales                                        5,60,000

To purchases                     3,50,000        By closing stock                           1,00,000

To wages                                9,000

To Gross profit                  2,01,000

———–                                                            ————

6,60,000                                                             6,60,000

———–                                                           ————-

To Administrative exp          20,000       By Gross profit                             2,01,000

To selling expenses               89,000       By interest on investments              10,000

To Non- operating exp          30,000       By profit on sale of investments       8,000

To Net profit                         80,000

————                                                           ————

2,19,000                                                             2,19,000

————-                                                          ————-

 

 

 

 

 

 

 

 

 

 

SECTION-C

(Answer any two questions  )                           (2X20=40)

 

19.a) From the following transactions, prepare separately the stores ledger account,

using  The following methods; a) FIFO b) LIFO

Jan 1. Opening  balance              100 units @ Rs.5 each.

5   Received                           500 units @ Rs.6 each.

7   Issued                                300 units

9   Issued                                200 units

10 Received back from work order 10 units issued on 9^th February.

13.Received                             600 units @ Rs.5 each.

16.Issued                                  300 units.

20. Returned to supplier 50 units purchased on 13^th January
21. Issued                     200 units.
22. Received 500 units at Rs.7 per unit.
23. Issued 300 units.

Stock verification on 27^th January revealed a shortage of 10- units..

OR

19.b) I)  Following data is obtained in the books of –V –Ltd for the year2005

 

Opening stock of raw materials                                          25,000

Closing stock of raw materials                                           40,000

Purchase of raw materials                                                   85,000

Carriage inwards                                                                   5,000

Direct wages                                                                       75,000

Indirect wages                                                                     10,000

Other direct charges                                                           15,000

Rent and rates  –

Factory                                                                      5,000

Office                                                                           500

Indirect consumption of materials                                           500

Depreciation of plant                                                            1,500

Depreciation of office furniture                                               100

Office salary                                                                         2,500

Salesmen salary                                                                    2,000

Other office expenses                                                              900

Other factory expenses                                                         5,700

Managing director’s remuneration                                     12,000

Other selling expenses                                                          1,000                                              Travelling expenses                                                               1,100

Carriage outwards                                                                  1,000

Sales                                                                                  2,50,000

Advance income tax paid                                                     15,000

Advertisement                                                                        2,000

 

Managing director’s remuneration is allocated as Rs.4,000  to the factory , Rs.2,000

To the office and Rs.6,000 to the selling departments.

Prepare a cost sheet showing the following;

1. Prime cost b) Works cost c) cost of production d) cost of sales e) Net profit.

 

 

 

 

20 a).The following are the summarized Balance sheets of L- Ltd as on 31-st

Dec.2003 and 2004, you are required to prepare , a) Schedule of changes in the

working capital

1. Fund flow statement.

Balance sheet

—————————————————————————————————-

Liabilities     30-6-2003      30-6-2004        Assets           30-6-2003      30-6-2004

(Rs)                  ( Rs)                                      (Rs)                ( Rs)

—————————————————————————————————-

Share capital      1,80,000        2,00,000         Goodwill            24,000         20,000

Reserve fund        28,000           36,000          Building             80,000         72,000

P&L A/c               39,000           24,000          Machinery         74,000         72,000

Trade creditors      16,000           10,800          Investments       20,000         22,000

Bank overdraft      12,400             2,600          Inventories         60,000         50,800

Prov. For tax.        32,000           34,000          Cash                   13,200         30,400

Prov. For doubtful  3,800             4,200          Debtors              40,000         44,400

Debts

—————————-                                 ————————–

3,11,200        3,11,600                                   3,11,200     3,11,600

—————————-                                 —————————

Additional information;

1. i) Depreciation charged on machinery Rs.10,000 and on buildings Rs.8,000
2. ii) Investments sold during the year Rs.3,000

iii) Rs.15,000 interim dividend paid during Jan.2004

1. iv) Taxes paid during the year Rs.30,000.

OR

20.b)Balance sheets of A and B are as follows, You are asked to prepare cash flow statement.

Balance sheets

——————————————————————————————————–

Liabilities                  2003         2004                Assets              2003        2004

Rs              Rs                                          Rs             Rs

 

Equity share capital         3,00,000    4,00,000     Goodwill            1,15,000   90,000

 

Land& building   2,00,000 1,70,000

8% Red.pre.cap.              1,50,000    1,00,000       Plant                     80,000 2,00,000

General reserve                  40,000       70,000       Debtors              1,60,000 2,00,000

P&L A/C                            30,000       48,000      Stock                      77,000 1,09,000

Proposed dividend             42,000       50,000       Bills receivable      20,000   30,000

Creditors                            55,000       83,000       Cash in hand          15,000    10,000

Bills payable                      20,000       16,000       Cash at bank          10,000      8,000

Provision for taxation        40,000       50,000

—————————                               ———————–

6,77,000     8,17,000                                  6,77,000 8,17,000

—————————                              ————————

Additional information;

1. Depreciation of Rs.10,000 and 20,000 have been charged on plant account and

Land  and building account respectively in2004

2004. An interim dividend of Rs.20,000 has been paid in 2004.
2005. Income tax of Rs.35,000 was paid during the year 2004.

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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

           B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION

AP 13

FIFTH SEMESTER – APRIL 2008

BU 5501 – COST & MANAGEMENT ACCOUNTING

 

 

 

Date : 30-04-08                  Dept. No.                                        Max. : 100 Marks

Time : 1:00 – 4:00

PART  A

Answer ALL questions                                                                    Marks: 10 x 2 = 20

Explain the following:

1. Cost unit
2. Margin of safety
3. Overtime premium
4. Cash from financing activities
5. Bin Card
6. Current Ratio
7. Working Capital is Rs.40,000. Current ratio 2; Stock Rs.30,000. Calculate Current Assets and Liquid Assets.
8. Standard time 10 hours; Actual time taken 8 hours; Time rate Rs.12 per hour. Calculate earnings under Halsey Plan.
9. Annual usage of material 6,000 units; Material cost per unit Rs.20; Ordering cost per order Rs.60; Carrying cost Rs.2 per unit per annum. Calculate Economic Order Quantity.
10. Selling price per unit Rs.40; Variable cost per unit Rs.30; Fixed cost Rs.10,000. Calculate break even sales in rupees.

 

PART  B

 

Answer FIVE questions, choosing at least TWO questions from each section.

Marks: 5 x 8 = 40

SECTION  I

 

11. What is Labour Turnover? Explain the causes of Labour Turnover.

 

12. Prepare Stores Ledger Account assuming materials are priced using ‘weighted average method’.

1/12/07         purchases 800 units at Rs.3 per unit.

6/12/07         issued 500 units

8/12/07         purchases 600 units at Rs.4 per unit.

10/12/07       purchases 700 units at Rs.4 per unit.

15/12/07       issued 800 units

20/12/07       purchases 300 units at Rs.5 per unit.

27/12/07       issued 200 units.

 

13. From the following data, prepare a statement showing the labor cost per day of 8 hours.
14. Monthly salary (basic + DA) 400
15. Leave salary 15% of Basic + DA
16. Employee’s contribution to Provident Fund 8% of salary (a + b)
17. Employer’s contribution to ESI 5% of salary (a + b)
18. Pro-rata expenditure on amenities to labor 25 per head PM
19. of working hours in a month 200

 

14. From the following information, calculate a composite machine rate, for a machine whose scrap value is nil.
15. Cost of machine 3,60,000
16. Installation charges 40,000
17. Working life 20 years
18. Working hours 8000 per year
19. Repair charges 50% of depreciation
20. Power 10 units per hour at 10 p per unit.
21. Lubricating oil 2 per day of 8 hours
22. Consumable stores 10 per day of 8 hours
23. Machine operator’s wages 4 per day

 

SECTION II

 

15. State the merits and limitations of Ratio Analysis.

 

16. A Ltd gives you the following data:

Selling price per unit           Rs.100

Material cost per unit          Rs.30

Labor cost per unit             Rs.20

Variable overhead per unit   Rs.10

Fixed overheads                 Rs.40,000

Calculate:

1. Break even sales in units.
2. Sales in units to earn a profit of Rs.20,000.
3. Profit if sales are 6,000 units
4. New break even sales if selling price is reduced by 10% and Fixed Cost increased by Rs.2000.

 

17. X Ltd. gives you the following data:

Sales                               Rs.2,00,000

Cost of goods sold              Rs.1,50,000

Administration expenses      Rs.20,000

Debtors                            Rs.50,000

Average stock                             Rs.25,000

Calculate:

1. Gross profit ratio
2. Operating profit ratio
3. Debtors collection period
4. Stock turnover

 

18. AB Ltd. gives you the following information:

Profit before tax                Rs.20,000

Depreciation written off       Rs.10,000

Goodwill written off            Rs. 5,000

Loss on sale of investment   Rs.8,000

Profit on sales of machinery Rs.6,000

Income tax paid                 Rs.18,000

Decrease in debtors            Rs.15,000

Increase in stock                Rs.5,000

Decrease in creditors          RS.2,000

Calculate cash from operating activities.

 

PART  C

 

Answer ANY TWO questions                                             Marks 2 x 20 = 40

 

19a. From the following details, prepare the Balance Sheet of a company.

Gross profit ratio 20%; Debtors turnover 6 times; Fixed assets to Net worth 0.8;

Reserves to capital 0.5; Current ratio 2.5; Liquid ratio 1.5; Net working capital Rs.3,00,000; Stock Turnover ratio 6 times.

OR

 

19b. The following are the Balance Sheets of ABC Ltd as on 31^st March 2006 and 31^st March  2007.

	31/3/2006 Rs.	31/3/2007 Rs.		31/3/2006 Rs	31/3/2007 Rs.
Share capital P/L Account Long-term loans Creditors Tax provision Proposed Dividend	3,64,000 4,90,000 5,00,000 6,000 86,000 24,000   14,70,000	3,96,000 6,96,000 2,00,000 12,000 1,02,000 30,000   14,36,000	Fixed Assets Investments Stock Debtors Bank Cash	13,36,000 20,000 20,000 38,000 50,000 6,000   14,70,000	12,78,000 – 24,000 56,000 48,000 30,000   14,36,000

 

1. Depreciation provided on Fixed Assets Rs.1,00,000
2. Fixed Asset whose book value was Rs.50,000 was sold for Rs.40,000
3. Tax paid during the year Rs.80,000
4. The proposed dividend of 2006 was paid in 2007
5. Investments were sold at a profit of Rs.2000

Prepare Fund Flow Statement.

 

20a. RC Ltd manufactured and sold 1000 radios during the year 2007. Details of cost and sales are as follows:

Cost of materials Rs.80,000; Direct wages Rs.1,20,000; Factory overheads Rs.50,000; Administration overheads Rs.1,00,000; Selling overheads Rs.20,000; Sales Rs.4,00,000.

During the year 2008, the company plans to produce and sell 1,500 radios. It is estimated that,

1. Material prices will increase by 20% and wage rates by 5%.
2. Factory overheads are to be charged as a percentage on prime cost.
3. Selling expenses per unit will remain unchanged.
4. Administration expenses will remain constant.

Prepare a statement showing the total cost and cost per unit and also the selling price to be charged per radio, if the company wants a profit of 20% on cost.

 

OR

 

20b. In a factory, there are two Production depts., A and B, two Service depts., X and Y.   the overhead expense of these four depts. Are as follows:

A – Rs.6,500; B – Rs.6,000; X – Rs.1,200 and Y Rs.1,000

The expenses of the Service Dept are to be divided between the other departments on the following percentage basis:

Dept. X                   Dept A 50%             Dept B 30%             Dept Y 20%

Dept. Y                   Dept A 40%             Dept B 50%             Dept X 10%

1. Prepare a statement showing the distribution of the Service dept expenses to the Production dept.
2. Dept A absorbs overheads at a rate per labor hour and Dept B at the rate per machine hour. The estimated labor hours and machine hours in the respective depts. Are 2000 hours and 1000 hours respectively.

Calculate the overhead recovery rates for the two departments.

1. Calculate the price to be quoted for a job that requires Rs.500 in material, Rs.200 in wages and uses 6 Labor hours in Dept A and 4 machine hours in Dept B.

The company wants a profit of 25% on cost.

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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.B.A. DEGREE EXAMINATION – BUSINESS ADMINISTRATION

OA 07

FIFTH SEMESTER – November 2008

BU 5501 – COST & MANAGEMENT ACCOUNTING

 

 

 

Date : 15-11-08                       Dept. No.                                          Max. : 100 Marks

Time : 9:00 – 12:00

PART A

Answer ALL questions                                                                                                             (2 x 10 = 20)

 

1. What is ABC Analysis?
2. Explain the treatment of idle time in Cost Accounting.
3. Distinguish between BIN card and Stores Ledger.
4. Explain Debt Equity Ratio.
5. Distinguish between Bread even Point and Margin of Safety.
6. What is Working Capital?
7. Annual usage 6000 units. Cost per unit Rs.20. Cost of placing and receiving one order is Rs.60. annual carrying cost Rs.2 per unit. Calculate Economic Order quantity.
8. Normal piece rate is Rs.2 per unit. Standard time allowed for 25 units is 1 hour. A produced 150 and B produced 250 units in 8 hours. Calculate their wages under Taylors Differential Piece rate.
9. Sales 1000 units at Rs.10 each. Variable cost Rs.6 per unit. Fixed cost Rs.8000. Calculate Break even point and sales to earn a profit of Rs.10000.
10. Credit sales Rs.80000. Debtors on 31.12.1993 Rs.10000. Calculate debtors collection period.

 

PART  B

 

Answer FIVE questions selecting at least TWO questions from each section.                   ( 5 x 8 = 40)

 

SECTION 1

 

11. What is labor turnover? What are its causes? Explain any 2 methods for computing labor cost.

 

12. The accounts of XY Ltd for the year ending 31.12.2007 showed the following:

Material used Rs.1,00,000; Direct wages Rs.80,000; Works overheads Rs.16,000; Office overheads Rs.9,800. Prepare a Cost Sheet from the above.

In 2008 the company is asked to quote for a job for which material required is Rs.500 and direct wages Rs.300. profit required is 20% on cost. Works overheads are recovered as a percentage of wages and Office overheads as a percentage of Works cost.

Compute the price to be quoted for the job.

 

13. From the following particulars calculate the earning of a worker under (1) straight piece rate (2) Taylors differential piece rate (3) Halsey plan (4) Rowan plan.

No. of working hours per week = 48; wages per hour Rs.3.75; Normal time per piece 20 minutes; rate per piece Rs.1.50; normal output for the week 120 pieces; actual output for the week 150 pieces. Differential piece rate 80% of piece rate when output is below standard and 120% when above standard.

 

14. Compute machine rate from the following data:

Cost of machine                      Rs.13,500

Life of machine                                   10 years

Scrap value at end of 10 years Rs.1,980

Working hours per annum       1800

Insurance per annum               Rs.45

Consumable stores p.a.                        Rs.75

Rent for the dept per annum    Rs.975

Foreman’s salary p.a.               Rs.7,500

Lighting for dept. p.a.              Rs.360

Repairs for entire life               Rs.1440

The machine uses 10 units of power per hour at 10 paise per unit. The machine occupies 1/5^th of the area of the department and the foreman devotes 1/5^th of his time for this machine. The machine uses two light points out of a total of 12 for lighting the department.

 

SECTION 2

 

15. State the merits and limitations of Ratio Analysis.

 

16. Prepare an Income statement from the following and calculate

• Gross profit ratio (b) net profit ratio (c) interest coverage ratio (d) operating profit ratio.

Sales   Rs.8,00,000

Administration expenses Rs.40,000

Selling expenses Rs.80,000

Interest paid Rs.30,000

Cost of goods sold Rs.4,00,000

Income tax provision Rs.30,000

 

 

 

 

17. From the following data calculate:
18. Break even sales in rupees and units
19. Selling price if break even sales is to be reduced to 6,600 units
20. Profit if sales are Rs.8 lakhs.
21. Margin of safety if profit is Rs.60,000.

Selling price Rs.20 per unit; variable cost Rs.14 per unit; Fixed cost Rs.79,200.

 

18. The Balance Sheet of ABC Ltd on 31/12/2004 and 31/12/2005 are as follows:

2004                2005                                        2004                 2005

Equity Capital (Rs.10)100,000           200,000           Machinery       120,000           260,000

P/L A/c                           30,000            50,000           Furniture          30,000              40,000

12% Debenture              50,000          150,000           Stock                50,000              40,000

10% ICICI bank loan    50,000                                  Debtors              30,000              60,000

Creditors                        20,000             25,000          Cash                  10,000                 5,000

Tax provision                40,000            60,000          Bank                  50,000               80,000

290,000          485,000                                  290,000             485,000

(a) Machinery worth Rs.50,000 were purchased and paid for by the issue of equity shares.

(b) Depreciation provided on machinery Rs.30000 and on furniture Rs.5000.

(c) During the year 2005, Income tax Rs.50,000 and interim dividend Rs.8,000 were paid.

Prepare Fund Flow statement.

PART C

 

Answer Two questions (choosing 1 from each section)                                         Marks : 2 x 20 : 40

 

SECTION 1

 

19.M.Ltd, has 3 production depts.. A, B and C and 2 service dept., X and Y.  following particulars are available for the month of March 2005.

Rent   Rs. 30000,  Building Tax  Rs. 15000,  Electricity   Rs.2400,  Indirect wages  Rs.12000,  Power Rs. 6000,  Depreciation on machinery Rs. 40000,  Canteen expenses Rs. 30000,  Welfare expenses Rs. 20000.  The following further details are available:

 

Total      A         B         C         X         Y

Floor space(Sq mts.)                           5000    1000    1250    1500    1000    250

Light points (nos)                                  240       40        60         80        40       20

Direct wages (Rs.)                               40000 12000  8000    12000  6000    2000

HP of machines (nos.)                           150       60        30         50        10       –

Cost of machines (Rs.)                                   200000 48000  65000  80000  4000    4000

Working hours                                                –             2335  1510     1525  –             –

The expenses of the service dept. are to be allocated to the production depts.. as follows:

A         B         C         X         Y

X                                             40%     30%     20%     –           10%

Y                                             30%     20%     40%     10%     –

Calculate the overhead absorption rate per hour for each of the three production depts.

What should be the price to be quoted for a job which would require Rs. 2000 material, Rs.1500 in wages and the job is handled by the three production depts. as follows:

Dept A. 6 hrs., Dept.B  10 hrs and Dept C. 4 hrs.  A profit of 25% on total cost is expected.

 

20.The following transactions took place in the month of December 2007 in respect of material X:

Dec.1   purchased 200 units at Rs.2 per unit.

10^th      purchased 300 units at Rs.2.4 per units

15^th      issued 250 units

18^th      purchased 250 units at Rs.2.6 per unit

20^th      purchased 150 units at Rs.2.5 per unit

24^th      issued 200 units

28^th      purchased 100 units at Rs.2.70 per unit

30^th      issued 250 units

Prepare the Stores Ledger, pricing the issues under (a) Weighted Average Method (b) FIFO method

 

 

 

 

 

 

 

 

 

 

 

 

 

SECTION 2

 

21. From the following data prepare the Balance Sheet

Current ratio                                                  1.75

Liquid ratio                                                    1.25

Stock turnover ratio                                       9

Gross profit ratio                                           25%

Debt collection period                                   1.5 months

Reserves and surplus to share capital            20%

Fixed assets turnover (cost of sales)              1.2

Long term debt to share capital                     60%

Fixed assets to net worth                              1.25

Sales for the year                                           Rs.12 lakhs

 

22. The Balance Sheet of XYZ Co. as on 31/12/2005 and 31/12/2006 are given below:

2005                2006                                        2005                2006

(Rs.)                (Rs.)                                        (Rs.)                (Rs.)

Equity capital (Rs.10) 1,00,000         1,50,000          Fixed assets     2,00,000          3,50,000

P/L a/c                          40,000              80,000         Investments         40,000             60,000

General Reserve           30,000              50,000         Stock                   60,000             50,000

12% Debentures        1,00,000              2,00,000      Debtors               50,000             70,000

Creditors                        80,000             50,000         Cash                     20,000            30,000

Tax provision                   80,000       1,00,000         Bank                     60,000            70,000

———- ———-                                       ———             ———-

4,30,000          6,30,000                                    4,30,000            6,30,000

 

Income statement for the year ended 31/12/2006

Rs.

Sales                                                                                                     20,00,000

Less: Cost of goods sold                                                                      15,00,000

Gross Profit                                                                                             5,00,000

Less: Adm. & selling expenses                                 2,50,000

Depreciation                                                   46,000

Loss on sale of fixed assets                                       10,000

Interest                                                           24,000                3,30,000

Profit before tax                                                                                       1,70,000

Less: Provision for tax                                                                                70,000

Profit after tax                                                                                          1,00,000

Less: Interim Dividend                                    40,000

Transfer to Reserve                            20,000                                60,000

Retained earnings                                                                                        40,000

 

During the year 2006, a machine whose book value is Rs.40,000 was sold for Rs.30,000/-

Prepare Cash Flow statement as per AS3.

 

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